Superstitions and rituals: what do you do for luck?
Lucky pairs, lucky hours, rituals before entries — traders are a superstitious bunch, and the rituals serve a real function: they calm the mind. The question is when they cross into magical thinking.
What are yours?
- the ritual or superstition you keep
- what it actually does for you
- where you draw the line
The expectancy guide draws the line with numbers.
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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