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Whether the extra trades add money or only costs.
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Edge map
A high win rate can lose money and a low one can earn. Only the pair, win rate and reward to risk after costs, says whether a method has an edge. See where yours sits.
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Your numbers
Where you stand
An example with typical numbers. Change any box to use your own.
On the right side of the line. 45% at 1.5 to 1 earns +0.07 of the risk per trade after costs. Break-even at your reward is a 42.0% win rate.
- Break-even lines
- At 1.5 to 1 you need more than 42.0% winners. At 45% winners you need more than 1.33 to 1.
- How sure the win rate is
- From 50 trades, a 45% win rate could easily be anywhere from 31% to 59%: an edge from -0.28 to +0.43. That range crosses zero, so these trades cannot yet tell an edge from luck.
- In money
- +0.07 of the risk is $7.50 a trade per $100 risked, before taxes; over 100 trades, +7 times the risk of one trade.
Edge per trade after costs of 5% of the risk: win rate down the side, reward to risk across the top. Your spot is outlined.
| Win rate | 0.5 | 0.75 | 1 | 1.5 | 2 | 2.5 | 3 |
|---|---|---|---|---|---|---|---|
| 25% | -0.68 | -0.61 | -0.55 | -0.43 | -0.30 | -0.18 | -0.05 |
| 30% | -0.60 | -0.53 | -0.45 | -0.30 | -0.15 | 0.00 | +0.15 |
| 35% | -0.53 | -0.44 | -0.35 | -0.18 | 0.00 | +0.17 | +0.35 |
| 40% | -0.45 | -0.35 | -0.25 | -0.05 | +0.15 | +0.35 | +0.55 |
| 45% | -0.38 | -0.26 | -0.15 | +0.07 | +0.30 | +0.52 | +0.75 |
| 50% | -0.30 | -0.18 | -0.05 | +0.20 | +0.45 | +0.70 | +0.95 |
| 55% | -0.22 | -0.09 | +0.05 | +0.33 | +0.60 | +0.88 | +1.15 |
| 60% | -0.15 | 0.00 | +0.15 | +0.45 | +0.75 | +1.05 | +1.35 |
| 65% | -0.07 | +0.09 | +0.25 | +0.57 | +0.90 | +1.23 | +1.55 |
| 70% | 0.00 | +0.17 | +0.35 | +0.70 | +1.05 | +1.40 | +1.75 |
Green earns, red loses, gold is too close to zero to matter. The numbers are averages: any single run of trades can land far from them, which the drawdown simulator shows.
Education only, not investment advice. The answer comes from the numbers you typed in, not from your account or the market. Simulated results are hypothetical and have limits: real trading has slippage, gaps, changing results and emotions. Trading leveraged products can lose money quickly, including all of it. Risk warning
Educational only, not financial advice; trading involves risk.
Two numbers, one edge
A method that wins 70% of the time but loses twice what it wins loses money. One that wins 35% of the time but makes three times what it loses earns. The break-even win rate is 1 divided by 1 plus the reward to risk: 50% at 1 to 1, 40% at 1.5, 33% at 2. Costs push every line up, most of all for close stops and small targets.
The win rate itself is a guess until there are enough trades behind it. With 50 trades, a 45% win rate could easily be anywhere from about 31% to 59%. That is why the first job of a journal is to collect trades, not to tune the method.
- Put your costs in with the cost check, then the edge into the drawdown simulator to see the risk it can carry.
- Compare ways of taking profit, which move both numbers at once, on the scale-out planner.
Not advice and not a forecast. The answer is arithmetic on the numbers you type, not a test of a strategy.
Next tools
Cost check
What spread, commission and swap take from each trade and a year.
Drawdown simulator
How deep a normal losing run goes at your size.
Pricing
Three ways in. Pick yours.
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Baroq never holds your money and never trades for you. Educational only, not financial advice; trading involves risk.