Why a High Win Rate Can Still Lose Money

A trading strategy can win eight out of ten trades and still lose money.

Imagine winning $50 on each winning trade but losing $250 on each losing trade.

Eight wins produce $400, while two losses cost $500. The result is a $100 loss before fees.

This is why I look beyond win rate.

Average win, average loss, trading costs, and execution all matter when evaluating a strategy.

The goal isn't simply to win more often. It's to build a process with positive expectancy over a meaningful sample of trades.