Win rate describes how often an outcome was positive. It says nothing by itself about how large the wins and losses were.
Keep the plan before the outcome
Record the instrument, date and time zone, reason, intended entry and exit assumptions, quantity and initial planned loss. Keep this record separate from the actual fills and the later explanation. Otherwise hindsight can make an improvised decision look like the original plan.
A basic review also needs the fees, currency effects, actual exit, net result and whether the stated rules were followed. Include unfilled orders and skipped qualifying examples in a separate log. A notebook or spreadsheet is enough; the exercise does not require a paid journal service.
Define R consistently
One R is the initial planned monetary loss for that individual example. Dividing a realised net result by that original amount allows a comparison in risk units. If the initial amount was £50 and the net outcome was minus £75, the result is minus 1.5R.
Do not shrink the original denominator after a loss or use different cost conventions between entries. If the original risk was zero or never recorded, the R comparison is undefined. Keep it missing rather than inventing a number afterwards.
Average outcomes matter more than win rate alone
In a hypothetical set of ten outcomes, six wins of +1R and four losses of −2R sum to −2R. The win rate is 60%, but the average outcome is −0.2R. These are arithmetic observations about the sample, not a forecast of the next trade.
For a simple two-outcome model, the average is win probability × average win minus loss probability × average loss. Real records can include break-even outcomes, changing position sizes and irregular costs, so the direct average of consistently measured net R results is often clearer.
Keep process and results in separate columns
A rule-following loss and an improvised win are different process observations even if the second feels better. Review both. Track the number of examples, the time span, changes in market conditions and the effect of a few unusually large results.
A small or selected sample can flatter almost any method. Keep a later untouched evaluation period, retain failed versions and compare with a stated baseline. A positive historical average does not establish a durable trading edge.
Audit ten fictional outcomes
Create six +1R outcomes and four −2R outcomes in a spreadsheet. Confirm the 60% win rate and −0.2R average. Add a separate rule-followed column and write what the arithmetic can and cannot tell you.
Terms in this guide
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Keep the plan and the outcome
A downloadable share-trading journal with 100 blank entries, calculated planned risk, net P&L and net R, plus instructions and four fictional examples.
GBP share prices and quantities only. Includes long and short arithmetic. Enter all costs yourself. No broker connection, macros or live prices.
Educational notes, not personalised financial advice. Hypothetical examples and chart shapes are not performance claims or trading signals.