Hit Rate
Also called: hit rate, win rate, strike rate, success rate, accuracy.
Formula
Hit rate = Occasions that worked / Total occasions taken.
How it is read
A hit rate only becomes meaningful with three other things beside it. Two of them are the base rate for the same population and the sample size it was measured on. The third is the size of a win against the size of a loss. A 60% hit rate against a 55% base rate is a five-point effect. The same 60% on twelve occasions is not distinguishable from a coin. And a 60% hit rate where losses run twice as far as wins is a losing arrangement.
What it does not tell you
A hit rate can be raised almost at will by letting losses run and taking wins early. That is why it is the number most easily flattered, and the one a marketing page reaches for first. It is also silent about cost, and cost is what turns many positive-looking hit rates negative. Treat any hit rate quoted without its base rate, its sample size and its win-to-loss ratio as an unfinished statement rather than a result.
Related concepts
Break-Even Hit Rate: How Often You Have to Be Right to Stand Still
If wins and losses are the same size, and every trade costs the same to place, the fraction that must be right just to stand still is fixed by arithmetic. With no costs at all it is 50%. Every rupee of cost pushes it above 50%. The smaller the bracket, the harder it pushes. A cost equal to a fifth of the bracket needs 60%, a huge difference in how good a decision process has to be.
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