What's your relationship with the market, honestly?
Adversary, teacher, casino, employer, puzzle — the relationship metaphors traders use reveal their psychology. The adversarial ones fight the market; the learner ones study it.
What's yours?
- the metaphor that fits how you treat the market
- how it shapes your decisions
- whether it's changed over the years
The expectancy guide works best when the market is a puzzle, not an enemy.
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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