A trader might tell you:
“I win in 80% of my trades!” 🔥
You might think he’s an excellent trader.
But wait…
How much does he lose when he loses?
This is where the truth begins.
🧮 A simple example:
You have 10 trades:
✅ 8 winning trades
❌ 2 losing trades
If:
Profit per trade = +$1
Loss per trade = -$5
Then the result is:
8 × $1 = +$8
2 × -$5 = -$10
📉 Final result = -$2
Even though the win rate was 80%!
🧠 So what should we measure?
Don't look at Win Rate alone.
Track:
1️⃣ Win Rate
The percentage of winning trades.
2️⃣ Average Win
The average profit on a winning trade.
3️⃣ Average Loss
The average loss on a losing trade.
4️⃣ Risk/Reward
How much you're risking compared to the potential reward.
5️⃣ Max Drawdown
The largest decline your account has experienced over a given period.
6️⃣ Losing Streak
Longest consecutive losing streak.
7️⃣ Expectancy
Does the trading strategy have a statistical edge over a sufficient number of trades?
🎯 A stronger example:
Strategy A:
Win Rate = 70%
But the average profit is small and the losses are large.
Strategy B:
Win Rate = 45%
But the average profit is much larger than the average loss.
You can't judge by Win Rate alone.
🔥 Rule:
“Don't ask: How many times did I win?
Ask: What was the outcome of my system after a sufficient number of trades?”
📋 Episode task:
Open your trade log and write down:
Number of trades:
Win Rate:
Average Win:
Average Loss:
Longest losing streak:
Max Drawdown:
Total result:
Then ask yourself:
“Do I have a strategy with an edge… or just a collection of random trades?”
🛡️ Important reminder:
Don't increase your position size because you've had a winning streak.
And don't use Futures or Leverage to try to speed up your results.
Past performance does not guarantee future results.
#cryptouniverseofficial #BinanceSquare
