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Win Rate

Definition

Win Rate is the percentage of trades won out of the total amount of trades taken. These refer to round trip trades, where an entry and exit are both submitted fully closing the position. We will explain how win rate factors into the algorithm, how it relates to trading frequency, and what the ScaleTrade algorithm's win rate means. The general formula for win rate is as follows:
WinRatePercent=(WinningTradesTotalTrades)100WinRatePercent=(\frac{WinningTrades}{TotalTrades})*100

​Backtests

In this section, we will be discussing the win rates of the 6-year, 2-year, and 1-year backtests. Based on our backtests, we get the following trade counts and win rates for the tested securities:
Security
2016-2022
2016-2022
2020-2022
Trades 2020-2022
Win Rate 2021-2022
Trades 2021-2022
AAPL
59.76%
1409
62.43%
503
68.25%
274
NVDA
68.03%
1636
71.31%
589
75.93%
324
AMD
70.55%
1674
71.31%
603
74.48%
337
QQQ
54.43%
1308
58.33%
480
63.74%
273
AMZN
62.51%
1547
65.34%
551
72.61%
303
From this table, we can then calculate the win rate across all of the securities by summing the winning trades for each security and dividing it by the total number of trades taken. After doing so, we get the following results:
Timeframe
Total Trades
Win Rate
2016-2022
7574
63.06%
2020-2022
2726
65.74%
2021-2022
1511
71.00%