Win rate is the number most traders look at first, and it’s often the least useful on its own. These four metrics, read together, tell you whether your trading actually has an edge.
Win rate
Win rate = winning trades ÷ total trades
If you closed 40 trades and 28 made money, your win rate is 70%. On its own, that tells you nothing about how much you made or lost.
Profit factor
Profit factor = total dollars won ÷ total dollars lost
If your winners made $2,400 and your losers lost $1,600, your profit factor is 1.5: you made $1.50 for every $1 you lost. Above 1.0 is profitable; below 1.0 is losing money.
Expectancy
Expectancy = (win rate × average win) − (loss rate × average loss)
Expectancy is your average result per trade. With a 70% win rate, an $86 average win, and a $133 average loss:
(0.70 × 86) − (0.30 × 133) = 60.20 − 39.90 = $20.30 per trade.
Breakeven win rate
Breakeven win rate = average loss ÷ (average win + average loss)
This is the win rate you need just to break even with your current win and loss sizes. With an $86 average win and a $133 average loss, you need 133 ÷ 219 ≈ 61%. Your actual 70% is above that, so you have a cushion.
What moves the numbers
| Change | What it does |
|---|---|
| Raise your win rate a few points | Adds roughly (average win + average loss) × the change, per trade |
| Cut your average loss | Lowers your breakeven win rate and raises expectancy |
| Skip your weakest setups | Improves every metric at once, if those trades were losing |
Example: with the numbers above, raising your win rate by 5 points adds about 0.05 × (86 + 133) ≈ $11 per trade, while cutting your average loss by 20% adds about 0.30 × 26.60 ≈ $8 per trade.
Put your trades on the record
Import your broker CSV and see every multi-leg trade grouped, your patterns, and your key findings. Free during early access.
Start freeThis guide is for education only and isn’t investment advice. Options involve significant risk and aren’t suitable for every investor. Examples are hypothetical.