# Calculating win-ratio

I want to quantify the performance of a trader and as I see in the books, there's a performance measurement called win ratio for this.
In a book, it is defined as:

Win ratio explains what portion of the trades, trading days or trading months ended
profitably.


Let's think of a day trader. She closes the day as flat. So, in order to define win ratio for her, I must calculate trade-by-trade performance, right? Because she is always flat at the end of days(my period is 1 day). For her, is it reasonable to define win ratio like the following?

WinRatio = # Trades|Gain>0 / # Total Trades


If so, then I want to clarify how should I count the winning and losing trades. Let's say she made the following operations:

• Operation 1 - bought 10 shares at €3
• Operation 2 - bought 10 shares at €4
• Operation 3 - sold 3 of 20 shares at €2
• Operation 4 - sold 5 of 17 shares at €1
• Operation 5 - sold 2 of 12 shares at €4
• Operation 6 - sold 12 shares at €3.6

Should I consider both buy and sell as separate trades? I mean, is it correct that there are 6 trades here? or only the sell operations should be considered as trades?

In my opinion, Operation 1 and Operation 2 are not trades, is it correct? If so, how should I tag these operations as "Winning trade" or "Losing Trade"?

• Is win rate really a good measure? I can sit there and sell \$1,000 lottery tickets with a 1/10 chance of winning for a dollar each. I will sell these all day, people would be stupid not to buy them. I would be stupid to sell them at that price. But i would have a win rate of ~90%...
– will
Sep 16 '21 at 21:45