Adjusted Win-Loss Ratio
A ratio that adjusts for both win rate and average win/loss sizes, measuring overall trading edge.
Formula
More Details
What is Adjusted Win-Loss Ratio?
Adjusted Win-Loss Ratio (AWLR) combines your win percentage, loss percentage, average win amount, and average loss amount into a single comprehensive metric. It tells you how much you're earning per dollar risked, adjusted for your win rate.
Formula
AWLR = (Win% × Avg Win) / (Loss% × Avg Loss)
Where:
- Win% = Number of winning trades / Total trades
- Loss% = Number of losing trades / Total trades
- Avg Win = Average profit on winning trades
- Avg Loss = Average loss on losing trades
Examples
| Win% | Loss% | Avg Win | Avg Loss | AWLR |
|---|---|---|---|---|
| 60% | 40% | $200 | $100 | 3.0 |
| 50% | 50% | $150 | $100 | 1.5 |
| 40% | 60% | $300 | $100 | 2.0 |
| 70% | 30% | $100 | $150 | 1.56 |
Interpretation
| AWLR | Meaning |
|---|---|
| > 1.5 | Strong edge, profitable system |
| 1.0 - 1.5 | Marginal edge, may lose after fees |
| < 1.0 | Negative edge, losing system |
Why AWLR Over Simple Win-Loss Ratio?
Simple Win-Loss Ratio (Avg Win / Avg Loss) ignores how often you win. AWLR weights by frequency:
- Trader A: 80% win rate, $50 avg win, $300 avg loss → WLR = 0.17, AWLR = 0.67
- Trader B: 30% win rate, $400 avg win, $80 avg loss → WLR = 5.0, AWLR = 2.14
AWLR provides a more complete picture of your edge.
TradesViz Implementation
- Automatic AWLR calculation
- AWLR per setup and symbol via Pivot Grid
- Trend analysis over time
- Comparison across trading accounts
Where to find it in TradesViz
Example
With 60% win rate, 40% loss rate, avg win of 200 and avg loss of 100, AWLR = (0.60 × 200) / (0.40 × 100) = 3.0