How do you find an edge as a beginner?
An edge is a repeatable reason why your trades should make more than they lose — not a magic indicator, but a specific setup with positive expectancy over many trades.
Experienced members: how did you find yours? Beginners: how are you searching?
- where you looked (and where you wasted time)
- how many trades it took to trust a setup
- how you tested before risking money
The expectancy guide gives the maths for judging any setup.
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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