Trading metrics
Win rate versus profit factor
Win rate measures how often counted trades win. Profit factor compares gross profits with the absolute value of gross losses on a stated basis. A high win rate can coexist with a losing strategy when occasional losses outweigh frequent gains. Both metrics need consistent trade definitions and sufficient observations.
Understand what counts as a trade
A single position can generate many partial fills and reductions. Counting fills instead of grouped completed positions changes the sample size and can change the apparent winning frequency. Breakeven treatment also matters: some methods include flat trades in the denominator and others do not.
When comparing WalletFollow profiles, use the same review period and the displayed trade basis. A leader’s closed positions in a portfolio report are not automatically the follower account’s trades. A metric based on incomplete history should remain unavailable or explicitly limited.
A high win rate can still lose money
Hypothetical example: nine winning trades earn $10 each and one losing trade loses $120. The win rate is ninety percent, but the gross result is negative $30. Gross profits of $90 divided by absolute gross losses of $120 produce a profit factor of 0.75, before any costs excluded from the calculation.
Reversing the shape can produce a lower win rate with positive profit: two wins of $100 and eight losses of $10 produce a $120 gross gain. Frequency alone does not identify which process is economically better.
Read costs, sample size and open exposure
A profit factor above one on gross trade PnL can fall below one after exchange fees, funding and execution costs. Read which costs the metric includes. Very few losses can make the ratio unstable; no observed losses can leave a finite ratio undefined rather than proving unlimited quality.
Closed-trade metrics can also miss a large losing position that has not closed. Review the current book and marked loss alongside the historical wins. Otherwise a strategy that repeatedly postpones losses can look stronger than its account equity path.
Combine complementary measures
Use winning frequency to understand the pattern, average gain and loss to understand scale, and drawdown to understand the path of account risk. Include holding duration, concentration and coverage when evaluating copy fit. No single score can replace reading how the account trades.
- Same completed-trade grouping.
- Same cost treatment and review period.
- Adequate wins and losses for interpretation.
- Open-position risk checked separately.
- No forecast from a historical percentage alone.