TradesMatrix Guide
Win Rate vs Risk Reward
Win rate measures how often trades win. Reward-to-risk compares the size of a planned gain with the amount at risk. Neither metric alone describes the full performance of a strategy.
The break-even relationship
Break-even Win Rate = Average Loss ÷ (Average Win + Average Loss)
If average wins are twice average losses, the simplified break-even win rate is about 33.3% before costs. This assumes a two-outcome model with consistent average wins and losses; actual results may differ.
Read both metrics together
- A higher win rate can come with smaller average wins.
- A lower win rate can be offset by larger average wins, but only if those outcomes occur often enough.
- Fees, slippage, and losing streaks affect realized outcomes.
- Use historical net expectancy and drawdown to add context.
A practical review
Calculate both metrics from the same closed-trade sample and strategy. Note trade count, costs, and the treatment of break-even trades. Do not change risk simply to improve one headline number.
Educational information only, not investment or financial advice. Calculator outputs depend on the inputs and assumptions used; they do not predict results or remove trading risk.