Win rate vs risk-reward: why a high win rate can still lose
“I win 70% of my trades” sounds great — and says almost nothing on its own. What matters is win rate together with how big the wins are compared to the losses.
Two numbers, one result
Win rate is the share of profitable trades. Risk-reward (R:R) here means the average win divided by the average loss. Neither tells you if you make money; together they do.
Example: win rate 70%, average win 50, average loss 150. Over 10 trades: 7 × 50 − 3 × 150 = 350 − 450 = −100. A trader with a 35% win rate, average win 300 and average loss 100 gets 3.5 × 300 − 6.5 × 100 = +400 over the same 10 trades.
The break-even win rate
For a given R:R you break even when win rate = 1 / (1 + R:R):
- R:R 0.5 → you need 67% wins
- R:R 1 → 50%
- R:R 1.5 → 40%
- R:R 2 → 33%
- R:R 3 → 25%
Fees and funding shift this a bit higher, which is why they must be inside the numbers.
How traders end up with a high win rate and losses
The usual pattern: profits are taken quickly “so they don’t disappear”, losing trades are held “until they come back”. Win rate goes up, the average loss grows faster than the average win, and the account goes down. A journal shows this immediately — compare the average holding time of winners and losers.
See these numbers for your own trades
Connect an exchange and your trades load automatically — PnL, fees and funding per trade. The demo works without signing up.
What to do with it
- Look at win rate and R:R together, over at least 50–100 trades.
- Compare them per setup, per coin and per side — one bad setup can drag down the whole result.
- If your R:R is below 1, check honestly whether the win rate really supports it, or whether losses need a hard stop.
In CheckMyProfit
The dashboard shows win rate, average win, average loss and the average R:R calculated from your real trades with fees and funding, and analytics break them down by coin, side, day of week, hour and tags.