What's your definition of a good trade as a beginner?
A good trade and a winning trade aren't the same thing. A good trade follows the plan whatever the result; a winning trade can still be a bad one if it broke every rule and got lucky.
How do you judge your trades?
- by result, process, or both
- how that definition changed for you
- the trade that taught you the difference
The expectancy guide explains why judging single trades by outcome leads you astray.
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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