From the main program menu click Tools and then Win Rate Calculator.
Input the value for the desired profit factor and the values of the profit target, stop-loss and then click Calculate to see the approximate value of the win rate.
The equation for the win rate as a function of the profit factor and ratio of average winning to average losing trade is the following:
P = 100 x PF/(PF + Rwl)
where P is the win rate, PF is the profit factor (equal to sum of winning trades divided by the sum of losing trades) and Rwl the average winning to average losing trade. A modified formula is used in the Win Rate Calculator as follows:
Pa = 100 x PF/[PF + k x (T/S)]
where Pa is the approximate win rate, T is the profit target, S the stop-loss and k is a factor that accounts for trading friction, set at 0.75 in the formula. In the case of short-term strategies, the theoretical and approximate values of the win rate are close for k=0 (no trading friction), provided a sufficiently large sample of trades is available.
You can access the Win Rate Calculator while creating a search workspace in order to determine the appropriate value for this parameter. The profit target T and stop-loss S can be specified either as percentages of the entry price or increments added to the entry price (points) and must correspond to the values specified in the T/S file. If the T/S file contains multiple sets of profit target/stop-loss values, then the maximum value for the calculated win rate must be used.
Note: Local Regional Settings are overwritten with English Regional Settings conventions. Use “.” for the decimal point.
Warning: T and S must be both specified as percentages or increments (points). Mixed values (one specified as percent and the other as increment) may give misleading figures for the win rate.