**Why high expectancy trading is so important** **Expectancy** and not win rate is the key to trading success.
Expectancy = (Avg win * Win rate) minus (Avg Loss * Loss rate)
Therefore, the emphasis is on maximising winners and minimising losses through effective **position sizing** and risk management.
Assumption: You do need a trading edge.
Discuss!
__________________
Audere est Facere
"The trend is your friend and divergences are your best friend until the bend at the end"
Party on like it's 1930, until Mr C (Wave) gatecrashes the party.
*
Last edited by fibonelli; Mar 3, 2009 at 6:10pm.
* |