Metrics · 6 min read
Win rate vs profit factor: which one should you watch?
Win rate answers "how often was I right?". Profit factor answers "did being right pay for being wrong?". Only the second question affects the balance.
The two numbers measure different things
Win rate is the count of winning trades divided by total closed trades. It is a frequency. Profit factor is total winnings divided by total losses. It is a ratio of money.
A strategy that wins 80% of the time and loses five times as much on each loser is a losing strategy. A strategy that wins 35% of the time with large winners can grow steadily. Neither statement is visible from win rate alone.
Expectancy connects them
Expectancy = (win rate × average win) − (loss rate × average loss). It expresses what one average trade is worth, and it is the number that makes the trade-off explicit.
If your expectancy is positive but small, position sizing and cost control matter more than finding new setups. If it is negative, more trades simply reach the same conclusion faster.
What to actually review each week
A useful weekly set is small enough to read in one sitting:
- Net result after commission, swap and fees.
- Trade count — context for every other number.
- Profit factor and expectancy together.
- Average win and average loss, side by side.
- Maximum drawdown for the period.
- Win rate last, as a description rather than a target.
Beware of optimising the wrong one
Win rate is easy to inflate: cut winners early and let losers run, and the percentage climbs while the account falls. That behaviour is one of the most common patterns a journal surfaces, because the trader is unknowingly optimising for feeling right.
If you want one habit to measure, measure whether you exited at your planned level. That single field, tagged consistently, explains most of the gap between win rate and profit factor.