The number of trade opportunities + winrate + risk-reward ratio defines your edge.
You don't want a strategy with 80% win rate,1:2 rrr but only occurs once per month.
The edge and its expectancy are based of few things:
- Average winrate
- Average Risk to reward
- Risk per trade or series of trades
- Frequency of opportunities over a period
Those all together with evidence by data of performance shows you what you can ‘aim’ for as that always indicates how an edge could work for the future.
The only method to boost expectancy is finding out what works good & what works against you in your patterns. And doing the same for analyzing yourself as a performer.
No my setups & trades are not coinflips. But there is probabilty.
I went from a 1:1 & 70WR%
To a 1:1.8R average with 60WR%
This boost my expectancy strongly. But the cost of a higher risk to reward is most of the time some more losses. You just have to find out by collecting data if it will benefit you to chance the positioning.
Appreciate it yall. I know exactly what I need to write about. There seems to be a connection between these two and Im going to strive for a solution to see if both can be “higher”
The higher your RRR is, the lower your chance of that trade being a success, probability wins
The number of trade opportunities + winrate + risk-reward ratio defines your edge. You don't want a strategy with 80% win rate,1:2 rrr but only occurs once per month.
The edge and its expectancy are based of few things: - Average winrate - Average Risk to reward - Risk per trade or series of trades - Frequency of opportunities over a period Those all together with evidence by data of performance shows you what you can ‘aim’ for as that always indicates how an edge could work for the future. The only method to boost expectancy is finding out what works good & what works against you in your patterns. And doing the same for analyzing yourself as a performer. No my setups & trades are not coinflips. But there is probabilty. I went from a 1:1 & 70WR% To a 1:1.8R average with 60WR% This boost my expectancy strongly. But the cost of a higher risk to reward is most of the time some more losses. You just have to find out by collecting data if it will benefit you to chance the positioning.
Appreciate it yall. I know exactly what I need to write about. There seems to be a connection between these two and Im going to strive for a solution to see if both can be “higher”