Numbers do not lie. While your gut feeling might tell you that you are a good trader, the statistics tell the real story. Understanding and tracking the right metrics is essential for measuring your progress and identifying areas for improvement. This guide covers every statistic you need to know.
The Most Important Trading Statistics
These core metrics give you a complete picture of your trading performance. Focus on understanding these before moving to advanced statistics.
1. Win Rate (Hit Rate)
Your win rate is the percentage of trades that are profitable. It is calculated by dividing winning trades by total trades.
Win Rate Calculation
Formula: (Winning Trades / Total Trades) x 100
Example: 70 winning trades out of 100 total = 70% win rate
What it tells you: How often you are right about market direction. However, a high win rate alone does not guarantee profitability. You can win 80% of your trades and still lose money if your losses are much larger than your wins.
2. Average Win and Average Loss
These metrics show the typical size of your winning and losing trades.
- Average Win: Total profits divided by number of winning trades
- Average Loss: Total losses divided by number of losing trades
- Win/Loss Ratio: Average win divided by average loss
Key insight: The relationship between your win rate and win/loss ratio determines profitability. A 40% win rate with a 3:1 win/loss ratio is more profitable than a 60% win rate with a 0.8:1 ratio.
3. Profit Factor
Profit factor is one of the most important metrics for evaluating a trading strategy. It measures how much you make for every dollar you lose.
Profit Factor Calculation
Formula: Gross Profits / Gross Losses
Example: $5,000 in total profits / $2,500 in total losses = 2.0 profit factor
- Below 1.0: Losing money overall
- 1.0 to 1.5: Marginally profitable, needs improvement
- 1.5 to 2.0: Solid performance
- Above 2.0: Excellent performance
4. Expectancy (Expected Value)
Expectancy tells you how much you expect to make on average per trade. This is arguably the most important single number in trading.
Expectancy Calculation
Formula: (Win Rate x Average Win) - (Loss Rate x Average Loss)
Example:
Win Rate: 60%, Average Win: $200
Loss Rate: 40%, Average Loss: $150
Expectancy: (0.60 x $200) - (0.40 x $150) = $120 - $60 = $60 per trade
A positive expectancy means your system makes money over time. A negative expectancy means you will lose money regardless of how often you trade.
Risk-Adjusted Performance Metrics
Raw returns do not tell the whole story. These metrics account for the risk you take to achieve your returns.
5. Maximum Drawdown
Maximum drawdown measures the largest peak-to-trough decline in your account. It shows the worst losing streak you have experienced.
- Why it matters: A strategy with high returns but 50% drawdowns might blow up your account before reaching those returns
- Target: Most traders aim to keep maximum drawdown under 20%
- Recovery: Remember that a 50% loss requires a 100% gain just to break even
6. Sharpe Ratio
The Sharpe ratio measures risk-adjusted returns by comparing your excess return to the volatility of those returns.
- Below 1.0: Returns are not compensating for risk
- 1.0 to 2.0: Good risk-adjusted performance
- Above 2.0: Excellent risk-adjusted performance
7. Risk-Reward Ratio
This measures how much you stand to gain versus how much you risk on each trade.
Risk-Reward Example
Entry: $100
Stop Loss: $98 (risking $2)
Target: $106 (potential $6 gain)
Risk-Reward: 1:3 (risking $2 to make $6)
A minimum 1:2 risk-reward ratio is commonly recommended, meaning you aim to make at least twice what you risk.
Consistency Metrics
Consistent profits are more valuable than volatile returns. Track these metrics to measure your consistency.
8. Winning Days/Weeks Percentage
Track what percentage of your trading days or weeks are profitable. Consistent positive periods are more important than occasional big wins.
9. Standard Deviation of Returns
This measures how much your returns vary. Lower standard deviation means more predictable results.
10. Consecutive Wins and Losses
Track your longest winning streak and longest losing streak. This helps you understand the emotional challenges you will face and plan for drawdowns.
Execution Quality Metrics
These statistics measure how well you execute your trading plan.
11. Plan Adherence Rate
What percentage of your trades follow your trading plan rules? Track trades taken according to plan versus impulsive trades.
12. Early Exit Rate
How often do you exit winners too early? Compare your actual exits to what would have happened if you held to your target.
13. Stop Loss Adherence
What percentage of losing trades are exited at your planned stop loss versus letting losses run? This reveals discipline issues.
Time-Based Analysis
Breaking down your statistics by time reveals important patterns:
- By time of day: Morning, midday, afternoon performance
- By day of week: Some traders perform better on certain days
- By market condition: Trending, ranging, volatile environments
- By hold time: Performance on quick trades versus longer holds
Common finding: Many traders discover they are profitable during market open but lose money trading midday. Time-based analysis can reveal when to trade and when to stay out.
How to Use These Statistics
Tracking numbers is pointless without acting on them. Here is how to use your statistics:
- Establish baselines: Know your current statistics before trying to improve
- Identify weaknesses: Low win rate? Work on entries. Poor win/loss ratio? Work on exits.
- Set targets: Aim to improve specific metrics by specific amounts
- Track changes: Monitor how your statistics change as you modify your approach
- Compare strategies: Use statistics to evaluate which setups perform best
Get Your Statistics Automatically
Pro Trader Dashboard calculates all these statistics and more from your Robinhood trades. See your win rate, profit factor, expectancy, and performance breakdowns without manual calculations.
Summary
Understanding your trading statistics transforms you from a guessing trader to an evidence-based trader. Start with the core metrics (win rate, average win/loss, profit factor, expectancy), then add risk-adjusted and consistency metrics as you progress. Remember: the goal is not to track everything, but to track what helps you improve.
Continue learning about how to analyze your trade history or explore finding patterns in your trading data.