Robustness checks: what does it take for you to trust a backtest?
A single backtest is a claim; a trusted one has survived abuse: different periods, changed parameters, added costs, shuffled trades. Each check that survives raises the confidence.
What's your battery of checks?
- the tests you run before trusting results
- how you handle parameter sensitivity
- the strategy that passed everything and still failed
The expectancy guide sets the statistical baseline.
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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