Even with a win rate of 90%, the account can still be wiped out. How to read risk-reward

“90% win rate” is the cheapest number you can create in this industry. The method is simple: set take profit to +5 pips and stop loss to −100 pips. Win a little 100 times, lose a few big times. The win rate stays 90%, but your account decreases.

Win rate only makes sense when considered together with the ratio of take profit to stop loss (risk-reward). The calculation is simply this.

Win rate × average profit − (1 − win rate) × average loss. Whether this is positive or not.

Even with a 90% win rate, if average profit is 5 pips and average loss is 100 pips per trade, the expected value per trade is 0.9×5 − 0.1×100 = −5.5 pips, which is negative. Conversely, with a 40% win rate, if average profit is 60 pips and average loss is 20 pips, it’s +12 pips and positive. A higher win rate alone doesn’t tell you anything.

Therefore, what you should check on the sales page is a three-item set: win rate, average profit and average loss (or total pips and number of closures), and the denominator. In our test example, win rate 75.3%, 227 closures, +693.2 pips gained (after spread deduction +530.8 pips), and up to +2.3 pips per trade, which makes it evaluable (numbers from the tests). The reason the GENSEN-AI ranking has 19 items per unit is that you cannot decide from win rate alone.

Next time, we’ll discuss how to “inflate” the amount of learning.