Walk-forward testing: do you bother?
Walk-forward testing re-optimises a strategy on a rolling window and tests on the next period, simulating how it would have performed as conditions changed. It's the gold standard and almost nobody does it.
Do you?
- your walk-forward workflow, if any
- what it revealed about your setups
- why most traders skip it, in your view
The expectancy guide covers why static backtests mislead.
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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