Strategy switching costs: what do you actually pay when you change?
Switching strategies costs more than time: the new one starts untested, the old one's lessons go unused, and the switch itself often hides an emotional reaction to a loss. The costs are real and invisible.
What did switching cost you?
- the strategy you left and why
- what the transition actually cost
- how you now evaluate a potential switch
The expectancy guide argues for earning the sample before judging a strategy.
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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