The hit rate measures the rate between profits and losses of a strategy.
The hit rate is a very important key figure in terms of trading. Next to the reward/risk ratio it is the most important benchmark for a successful strategy.
What Is The Optimum Hit Rate?
According to the upper example it tends to be better the higher the hit rate.
Well, that is right, but next to the hit rate the reward/risk ratio is the other half of the deal.
Looking at the lottery the hit rate is very low because you need to guess 6 numbers correctly. Whereas the risk-reward-ratio is likely high because you will win a few million € by hitting.
On the other hand there are strategies which collect small profits and risk high losses, too. In this case traders want to make use of a high hit rate to be profitable.