Is win rate actually one of the most overrated trading metrics?
I keep seeing newer traders judge a strategy mostly by win rate.
I understand why. A 70% win rate feels safer than a 40% win rate.
But the more I look at strategy evaluation, the less useful win rate seems on its own.
A strategy can win often and still lose money if the losing trades are much larger than the winning trades.
Another strategy can win less than half the time and still make sense if the winners are bigger, the losses are controlled, and the drawdown is acceptable.
The metrics I would rather look at first:
- average winner vs average loser
- profit factor
- max drawdown
- number of trades
- backtest period
- fees and slippage
- performance in different market conditions
My current view is that win rate should probably be a secondary metric, not the first thing traders look at.
For people who have been trading for a while, do you agree?
What metric do you check first before trusting a strategy?