Miss rate is defined as the number of misses per number of instructions.
Suppose the first piece of data of your working set is at address 0x00, and the cache can hold 4 words per line. So when you go to access data at 0x4, you will miss, but the data will be fetched into the cache for addresses 0x00, 0x04, 0x8, 0x0C. Now if your next access is to 0x4, it will be a hit since it is already in the cache. So if you access data sequentially at 4 byte intervals, you get a hit once out of every 4 times, so your miss rate is 25%.
Now the cache can hold multiple of these 4 word lines (depends on the design of the cache - associativity, number of lines, word/byte access) so those will again dictate your capacity and conflict misses.
Hope that gives you an insight into how the cache works!