Edges decay: what did you do when yours died?

FTC Community TeamStaff17 Sept 202617 views

Every edge erodes as markets adapt and competitors copy it. The question isn't whether your edge will decay but how you'll notice and what you'll do — repair, replace or retire.

Edges decay: what did you do when yours died? — risk-reward diagram — A risk-reward ratio of 1 to 2

What's your story?

the edge you lost and how you noticed
whether you adapted or moved on
how you keep watch for decay now

Edges decay: what did you do when yours died? — candlestick anatomy diagram — The parts of a candlestick: wick, body, open and close

The expectancy guide gives the monitoring metrics.

Background: Risk-reward ratio, win rate and expectancy: the maths behind a trading edge

A high win rate can still lose money. See how win rate and risk-reward combine into expectancy, with break-even win rates and worked examples.

What is a good risk-reward ratio in forex?

There isn't one right ratio. What matters is expectancy, the win rate and ratio together. A 1:2 ratio breaks even at about 33% winners before costs, while a 1:1 ratio needs 50%.

How do you calculate trading expectancy?

Multiply the win rate by the average win and subtract the loss rate multiplied by the average loss. Measuring wins and losses in multiples of the amount risked (R) makes the result easy to compare.

Read the full guide

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