Why is a high win rate misleading you? 📊
🔹 Win rate is simply the share of profitable trades, but on its own, it says nothing about your strategy's quality.
🔹 Always evaluate win rate together with your average profit and average loss.
🔹 Pay attention to drawdown—the drop in capital from peak to minimum—to know what you will have to endure.
🔹 One positive day proves nothing. You need a series of trades in different market conditions, always accounting for fees and funding.
Here is an example: out of 10 trades, you have 7 profitable ones (+1 each) and 3 losing ones (-3 each). Total: 7 - 9 = -2. The win rate is 70%, but the actual result is negative!
Typical mistake: celebrating a high win rate while ignoring the size of average losses.
Which metric do you check first when evaluating a series of trades?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
🔹 Win rate is simply the share of profitable trades, but on its own, it says nothing about your strategy's quality.
🔹 Always evaluate win rate together with your average profit and average loss.
🔹 Pay attention to drawdown—the drop in capital from peak to minimum—to know what you will have to endure.
🔹 One positive day proves nothing. You need a series of trades in different market conditions, always accounting for fees and funding.
Here is an example: out of 10 trades, you have 7 profitable ones (+1 each) and 3 losing ones (-3 each). Total: 7 - 9 = -2. The win rate is 70%, but the actual result is negative!
Typical mistake: celebrating a high win rate while ignoring the size of average losses.
Which metric do you check first when evaluating a series of trades?
#Futures #CryptoTrading #CryptoEducation #RiskManagement
