According to the lecture "EFS 01 - Strategy Building in Equities" of the EPAT course (Batch 54), we can see in the Lecture Notes (document version 10.0.2, Slide 5), that the definiton of the hit (or success) ratio is: "probability of a trade being profitable". Which in order words is the percentage of profitable trades among all trades executed (profitable and non-profitable).
But according to Investopedia, the Success Ratio (or Win/Loss Ratio) is actually the ratio between winning trades and losing trades. They also call "Win Ratio" to what in the lecture is called "Hit Ratio".
Is there a mistake in the Lecture Notes? Or is there a reason why these definitions are not consistent?
Hi Maximiliano,
The definitions are ok in QuantInsti and Investopedia.
The Hit ratio or success ratio is the winning trades divided by the total trades.
The win ratio is the winning trades divided by the losing trades.
Depending on the literature, you can see several nomenclatures although the important thing is the significance to you of the ratio you are analysing.
Hope this helps.