Win rate or reward-to-risk ratio: which to check first in your demo log
Check the reward-to-risk ratio first — specifically the one your closed trades actually produced. Once you have that number, the win rate you need just to break even is a single division. Stare at win rate alone and you can sit on a flattering 70% while the balance drifts down.
The worked example below uses a twenty-trade demo log. Three steps: pull the numbers out of your fills, find your break-even win rate, then subtract fees and see how far that line moves. Arithmetic only; no indicators.
In this article
How to calculate win rate and reward-to-risk from a trade log
A trade runs from entry to exit. Only the closed result counts; whatever it showed while open does not.
- Win rate = winning trades ÷ all trades. Count scratches (roughly zero result) separately rather than lumping them with wins.
- Average win = total profit on winning trades ÷ number of winners.
- Average loss = total loss on losing trades ÷ number of losers, written as a positive number.
- Actual reward-to-risk (R) = average win ÷ average loss.
On demo you have to build these yourself. Binance's help page "How to Use Binance Demo Trading?" lists "all export features" among the things Futures demo does not support, and notes that Customer Support cannot see or verify demo order details (checked October 2026). So each time a position closes, copy its profit or loss in USDT into your practice log. The same page says Spot and Futures virtual funds can be reset separately. A reset only clears the balance; keep writing in the same log.
People use "risk-reward" for two different things, so split them now. One is set before you enter: distance to take-profit ÷ distance to stop-loss. Call that the planned ratio. The other is the formula above, built from trades that have already closed — the actual ratio. The advice in the first line is about the actual one.
Break-even win rate: what R demands of you
With actual ratio R, each win brings back R units on average and each loss costs 1. The win rate where you neither gain nor lose is:
Break-even win rate = 1 ÷ (1 + R)
Minimum win rate to break even, by actual R
A longer bar means you have to win more often. These are pre-fee lines; every bar gets a little longer once fees are taken out.
That is the whole case for looking at R first: it sets the pass mark for win rate. "My win rate is 60%" fails for someone whose R is 0.5 and clears easily for someone whose R is 2. On its own the number says nothing about whether you are doing well.
High win rate but losing money: two twenty-trade logs
Suppose two logs, twenty demo trades each, in virtual USDT. The figures are rounded to keep the sums easy.
| After twenty trades | Log A | Log B |
|---|---|---|
| Wins / losses | 14 / 6 | 7 / 13 |
| Win rate | 70% | 35% |
| Average win | 6 USDT | 30 USDT |
| Average loss | 20 USDT | 10 USDT |
| Actual R | 0.3 | 3 |
| Break-even win rate | ≈77% | 25% |
| Net | 84 − 120 = −36 | 210 − 130 = +80 |
Log A won fourteen times and feels fine. Its R is 0.3, though, so the pass mark sits near 77% and 70% falls short. Log B lost thirteen times, which is miserable to scroll through, yet each win pays for three losses and it sits well clear of its 25% line.
Log A has a shape that is easy to spot: sell as soon as there is a little profit, hold a loser "until it comes back". The first habit shrinks the average win; the second inflates the average loss. R gets squeezed from both ends. The win rate, meanwhile, goes up, because some of those held losers really did come back and got logged as wins. The prettier the win rate and the uglier the R, the more urgently you should reread the big losses.
When planned and actual R are far apart, look at your exits
Say every entry was written up in advance: stop 2% below the entry price, take-profit 4% above, planned ratio 2. After twenty trades the actual R is 0.8. That gap comes from execution. Go through the log in this order:
- Did any loss exceed the planned stop distance? Then the stop was never placed, or you placed it and cancelled it.
- How many winners did you close by hand before the take-profit price? If most of them, you are leaving early.
- How many stops triggered but filled noticeably worse than the trigger price? That comes from the gap you left for the limit price and how fast the market moved; give it its own column.
The first two are fixed by placing the stop and take-profit together when you enter and then leaving them alone — exactly what demo is good for; the mechanics are in the stop-loss and take-profit drills. The third you simply have to expect; demo cannot measure it for you.
How far fees move the break-even line
With real money every trade pays a fee twice, once to buy and once to sell, win or lose. Each winner keeps a bit less and each loser costs a bit more.
Assume 500 USDT per trade and a 0.1% fee (your own rate is on your account's fee page). Buying and selling once costs 1 USDT. Apply that to Log B:
- Average win drops from 30 to 29, average loss rises from 10 to 11, and R falls from 3 to about 2.6.
- The break-even win rate climbs from 25% to 11 ÷ (29 + 11) = 27.5%.
Log B still holds. Log A does not: average win 5, average loss 21, R about 0.24, pass mark about 81%. It was short before fees and is further short after. The smaller the position, the smaller each win and loss in absolute terms, and the heavier that 1 USDT weighs. What fees really cost on small trades works through that on its own; to plug in your own numbers, use the small-trade cost calculator.
Record whatever the fee column in your demo fills shows. Then subtract a realistic fee yourself as above — that line is the closer guide to what changes when the money is real.
How much can a twenty-trade win rate tell you?
Only a rough picture. A quick binomial estimate: if your "true" win rate were 50%, twenty trades would give a measured win rate with a standard deviation of about 11 percentage points, so anything from roughly 30% to 70% would be unremarkable. At a hundred trades the spread narrows to about 5 points. R wobbles too — one or two outsized trades can drag the average a long way.
Twenty trades are enough to find a fault, such as the "planned 2, delivered 0.8" gap above. They are nowhere near enough to prove a method makes money.
Where win rate and R fit in the readiness tests
The three readiness tests deliberately leave out "made a profit", and this article does not sneak it back in. Binance's own disclaimer on the demo page is blunt: performance on the Demo Trading Platform is not a reliable indicator of future performance or returns when live trading. What these two numbers do is give the third test — explain a loss — some evidence. You are using them properly if you can answer:
- What is your actual R, and which trades pulled it away from the planned R?
- Which side of your own break-even line is your win rate on, and is it still there after fees?
- If you are below the line, do you fix exits first (R too small) or entries first (win rate too low)?
If those come easily, go and tick group three on the readiness checklist. If they do not, the usual cause is an incomplete log. Filling in the log will teach you more than another twenty trades.