Tips

Why Win Rate is not the best metric


Win rate on forex trading is no doubt one of the most observed aspects when traders come into the forex exchange world. Thus, questions like “what is your win rate” or “what is your risk ratio”, are very frequently made when a forex signal provider has been assessed. However, do you know that Win Rate is not always the best parameter to evaluate a performance?

So, let me explain it better with some concepts and practical examples.

Survivorship Bias

Have you ever heard this term? This is a well-known phrase from the analysis of mutual funds. Especially in the hedge fund industry, this is a common problem.

What it means is that that there is a tendency to watch only the performance of “survivors”. This is the so-called “survivorship bias”.

For example, hedge funds make risky investments. Some of these funds make huge losses. The result is that investors sell their shares and the fund will be closed eventually.

If such a fund is liquidated within three years, it will not appear in a performance analysis of hedge funds over a period of five years. Thus, the performance for hedge funds appears to be better than it actually is.

And the same happens when copying other traders. For example, eToro forex broker has hundreds of thousands of customers. All their results are evaluated.

And even if none of those traders has any idea of ​​Forex trading, a certain percentage of them will succeed – just out of pure chance. Such traders will appear in the leader-boards of eToro and will be copied diligently.

Other traders may not know whether such persons have been successful because of their experience, their sharp analytical skills or their instinct, or whether they were just lucky.

What matters is the final result

It is quite obvious that you trade to make real money, not ratios. Therefore, the investor needs to note that in reality, Win Rate is just a metric, but it does not always mean extra money from forex trading.

Let me give you an example why win rate in forex or other markets, such as Stocks, CFDs, Commodities, Cryptos or Futures, is not the best parameter for choosing a trading signals provider.

Think about a track record of 100 trades in which 99 trades are Wins and just 1 is a Loss. So, you have 99% of win rate. But, it is possible that this only 1 trade in loss can be enough to make the other 99 trades not profitable.

How is it possible? Basically, if you have 99 wins making $1 each one, you will have $99. On the other side, that 1 loss can be $100. In doing so, the Win Rate would be 99%, but the final result would be unfeasible (negative).

Does it worth it? Absolutely no, but this is how most of forex signals providers on social media have been misleading forex traders. They disclosed extraordinary win rates and risk ratios, displaying just its win trades and hiding that 1 killer loss.

You must to also be aware of forex signal providers that display that amazing performance from practice accounts. They are the typical scammers.

What to do?

  1. Focus on monetary performance. What matter is money.
  2. Check parameters such as APY (annual percentage yields) or average monthly percentage yield.
  3. Ask for live track records, but beware on frauds. Scammers usually manipulate the way as they display their accounts.
  4. Search for reliable forex signals providers. They usually have a website, with detailed information about the trading strategies, the company and the team.

Trade forex with AI.

Wiseinvest.ai is a legit business, with cutting-edge trading solutions made by a team of real and committed specialists in finance and technology. All our signals are emitted by Artificial Intelligence, nurtured by the best live-trading strategies.

Our trading strategy considers that the performance must be composed of a final result in monetary unit, such as Dollars, Euro or Pounds. For this reason, although we make results disclosures in Pips, we always highlight trades in Dollars.

We also focus on the return of 40% of APY and not just on Win Rate, to help you make money in a trustworthy way.

The best way to trade forex

There are two ways to invest with our AI in forex:

1. Automated with AI-Trading. Check out the 3 steps to trade automated with our AI.

automated trading with ai bot

Don’t you have a broker account yet? Our AI is integrated to trade automated with the broker Oanda. Click here to open an account.

With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account and you can monitor the AI trading performance directly on our dashboard.

2. Manually with AI forex signals.

Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.

Each AI signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate pips or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.