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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:
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WinRatePercent=(WinningTradesTotalTrades)∗100WinRatePercent=(\frac{WinningTrades}{TotalTrades})*100
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​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
Win Rate 2016-2022
Trades 2016-2022
Win Rate 2020-2022
Trades 2020-2022
Win Rate 2021-2022
Trades 2021-2022
AAPL
58.73%
2166
59.67%
781
65.88%
425
AMZN
62.18%
2380
68.75%
880
72.06%
544
NVDA
69.41%
3194
74.1%
1247
75.54%
691
TGT
56.3%
2192
59.47%
760
68.16%
424
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
9932
62.45%
2020-2022
3668
66.71%
2021-2022
2084
71.16%