How do you measure a month of trading?
The month-end review turns a blur of trades into numbers. The useful metrics aren't just profit: win rate, average win versus loss, biggest drawdown, number of trades, and how many followed the plan.
What do you look at?
- your monthly metrics
- how you decide whether the month was actually good
- what you change based on the review
The journal guide and expectancy guide define the 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.
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