The win to loss ratio can be defined as the proportion of the total number of winning trades to the number of losing trades. It does not consider what amount was won or lost, but basically if they were winners or losers.
The equation for Win to Loss Ratio is:
Win to Loss Ratio = Wins / Losses
Let’s say that you have made 50 exchanges, of which 20 were wins and 30 were losses.
This is going to make your win to loss ratio 20 / 30, which diminishes to 2 / 3 or 2:3.
In percentage, the win to loss rate is 20 / 30 = 2/3 = 0.67, which implies that you are losing 67% of the time.
Utilizing your total number of trades (50), your rate of winning , or possibility of success, would be 20/50 = 40%.
The win to loss proportion is utilized to compute the risk / reward ratio, which is the profit capability of a trade comparative to its loss potential.
The profit potential of an exchange is determined by the difference between the price at the point of entry and the targeted price at the point of exit at which a profit will be made.