High win rate does not equal high profit
A strategy can win frequently but lose more on its occasional losing trades than it earns on its winners. Another strategy can win less often while remaining profitable because its average winner is much larger than its average loser.
Look at payoff as well
Win rate becomes more informative when combined with average win, average loss and profit factor. These numbers reveal more about the distribution of outcomes.
Beware of hidden tail risk
Some strategies can produce many small winners while carrying exposure to rare but very large losses. A smooth historical win rate should therefore be considered alongside drawdown and position-sizing behaviour.
For automated systems
Trade count and market regime matter. A win rate observed across hundreds of live trades and varied conditions is more informative than the same percentage from a short test.