Skip to main content
Win Rate (also known as the Hit Ratio) is a straightforward but critical metric that measures the probability of a strategy generating a positive return over a given series of periods or trades. In the Kalpi Backtester, Win Rate is typically calculated on a monthly basis, answering the question: “Out of all the months tested, how many finished in the green?”

​
The Mathematical Formula

The calculation for Win Rate is a simple percentage of positive outcomes relative to the total number of outcomes: Win Rate=(Winning PeriodsTotal Periods)×100\text{Win Rate} = \left( \frac{\text{Winning Periods}}{\text{Total Periods}} \right) \times 100

​
How to Interpret Win Rate

While a high Win Rate is psychologically comforting, it does not guarantee a profitable strategy on its own. It must always be evaluated alongside the Risk/Reward Ratio (the average size of your wins versus the average size of your losses).

High Win Rate / Low Reward

A strategy might have an 80% win rate, but if the average loss is five times larger than the average win, the portfolio will still lose money over time.

Low Win Rate / High Reward

Trend-following strategies often have low win rates (e.g., 35-40%) but remain highly profitable because their winning trades are structurally massive compared to their tightly controlled losses.
Where to find this in Kalpi: You can view your strategy’s precise Win Rate within the Monthly Distribution tab of the Portfolio Analysis terminal.