Is a win rate of 90% really a winning rate? Distinguishing the essence of trading

How much. It is. Hello.

Suddenly, though, you often hear phrases like “Win rate 90% of EA!” or “a method to keep winning with high win rate!” or “high win rate and keep winning!”

Indeed, if the win rate is high, it might feel like you “lose less.” But is that really enough to win?

To put it simply, a high win rate and ultimately making a profit are two different things.Rather, focusing too much on win rate can trap you in unexpected pitfalls.

This time, let’s dive into the“win rate trap”. This is where my aversion to indicators and EAs comes from.

Reasons why looking only at win rate is dangerous

It’s natural to think, “If I increase the win rate, I’ll win, right?” There are even logics with a win rate of90%. But the problem lies in risk-reward (profit/loss ratio).

For example, consider trades like this.

• Win rate90%!9times win,1 time loss.
• With 1win,+1 million yen, but a loss would be-10 million yen.

This makes the total balance break even. If the losses when you lose are bigger, no matter how high the win rate is, you’ll end up losing in the end.

In other words, a high win rate alone is meaningless. What matters is how you balance “one winning trade” and “one losing trade.” From this balance and the win rate, the expectancy can be calculated.

If you summarize this in a table, it would look like this.