How do you decide which trades to skip?
The trades you skip are invisible on the statement but often more valuable than the ones you take. Beginners measure activity; experienced traders measure selectivity.
What's your skip list?
- the conditions that automatically disqualify a trade
- how you recognise a marginal setup
- the best skip you ever made
The expectancy guide shows why fewer, better trades beat more, worse ones.
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.
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