Understanding ROI and Win Rate Metrics
When evaluating trading bots, you’ll encounter various performance metrics. Understanding what these numbers actually mean is crucial for making informed decisions. Let’s break down the most important metrics.
ROI (Return on Investment)
What It Measures
ROI indicates how much profit (or loss) you generate relative to your investment. For trading bots, this is typically shown as a monthly percentage.
Common ROI Formats
- Monthly ROI: Expected returns per month (e.g., 12.5%)
- Daily ROI: Daily percentage (typically 0.3-0.5%)
- APY: Annual projection accounting for compounding
Interpreting ROI Numbers
| ROI Range | Assessment |
|---|---|
| < 5%/month | Conservative but stable |
| 5-15%/month | Aggressive but achievable |
| 15-30%/month | High risk, high reward |
| > 30%/month | Likely unsustainable or extreme risk |
ROI Caveats
- Past performance ≠ future results
- Higher ROI typically means higher risk
- Consider volatility, not just returns
- Account for fees in calculations
Win Rate
What It Measures
Win rate is the percentage of profitable trades out of total trades executed.
The Math
Win Rate = (Profitable Trades / Total Trades) × 100
Example
- 100 trades, 68 profitable = 68% win rate
- 100 trades, 50 profitable = 50% win rate
Win Rate Reality Check
| Win Rate | Implication |
|---|---|
| > 70% | Excellent, but rare |
| 60-70% | Good, sustainable |
| 50-60% | Average, depends on R:R |
| < 50% | Needs strong risk management |
Risk-Reward Ratio
What It Measures
The relationship between potential profit and potential loss on each trade.
The Math
Risk-Reward Ratio = Potential Profit / Potential Loss
Example
- Take profit: +10%
- Stop loss: -5%
- Risk-reward: 2:1
Why It Matters
A 50% win rate with 2:1 R:R still profits:
- 50 trades at +10% = +500%
- 50 trades at -5% = -250%
- Net: +250%
Beyond the Basics
Sharpe Ratio
Measures risk-adjusted returns. Higher = better risk management.
Maximum Drawdown
Largest peak-to-trough decline. Critical for understanding downside risk.
Calmar Ratio
Similar to Sharpe but uses drawdown. Important for capital preservation.
How Bots Calculate These
Most bots track:
- Total volume traded
- Number of wins/losses
- Average trade duration
- Fees paid
- Net profit/loss
What to Look For
- Transparent reporting
- Verified track records
- Time-tested results
- Real user reviews
Setting Realistic Expectations
Realistic Targets for BSC Bots
- Monthly ROI: 5-15%
- Win Rate: 55-65%
- Max Drawdown: 10-20%
Warning Signs
- Guaranteed returns
- Win rates > 90%
- No mention of risk
- Pressure to deposit more
Using Metrics for Comparison
When comparing bots:
- Normalize timeframes: Compare same periods
- Account for fees: Subtract all costs
- Check volatility: Low drawdown preferred
- Verify authenticity: Third-party verification if available
Conclusion
Understanding these metrics helps you:
- Set realistic expectations
- Compare bots objectively
- Manage risk effectively
- Make data-driven decisions
Always remember: no metric guarantees future results. Use these as guides, not gospel.