Edge map
Win rate and reward to risk, after costs, on one map.
Free risk tools
Goal reality check
Most traders pick their risk backwards: from the money they want each month. Type in your goal and your real numbers, and see what the goal asks of your account.
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Your goal and your numbers
What the goal asks
An example with typical numbers. Change any box to use your own.
The goal asks for more risk than your limit allows. 10% a month needs about 6.67% a trade on average, where the chance of a 20% fall within 12 months is almost certain. Losses compound, so even at that risk the middle month makes only +3.3%. Your limit allows about 0.71% a trade, and there the middle month makes +1.0%.
- Your edge per trade
- +0.07 of the risk after costs, 20 trades a month.
- Risk that fits your limit
- About 0.71% a trade keeps the chance of a 20% fall within 12 months at 1 in 20 or less. There the middle month makes +1.0%: that, not the goal, is the honest number to plan with.
- At the risk the goal needs
- The middle month makes +3.3%; 40% of months reach 10%, 42% lose money. The typical deepest fall over 12 months is 70.9%.
| Risk a trade | Middle month | Months at the goal | Chance of -20% |
|---|---|---|---|
| 0.25% | +0.4% | 0% | 0% |
| 0.5% | +0.7% | 0% | 0% |
| 1% | +1.4% | 6% | 21% |
| 2% | +2.4% | 25% | 85% |
| 3% | +3.2% | 40% | 99% |
| 6.67% | +3.3% | 40% | 100% |
2,000 simulated runs of 12 months of 20 trades, each a win or a loss at your win rate, risk a share of the balance at the time. Hypothetical: real results vary from month to month far more than a steady win rate suggests.
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.
Pick the risk first, then live with the result
The return of a trading month is the edge per trade, times the number of trades, times the risk per trade. The edge and the number of trades come from your method; the only dial left is the risk. So a goal that is bigger than your edge can pay for turns, quietly, into a bigger risk per trade, and that brings deeper falls with it.
The steadier way round: choose the risk your drawdown limit allows, and let the month be what it is. Some months will be far above the middle, many below, and some will lose. A steady monthly figure is not something any honest method promises.
- Measure your edge first: win rate and reward from 50 real trades or more, after costs.
- Write the risk into your trading plan, and size each trade with the position size calculator.
Not advice and not a forecast or a promise of any return. The answer is arithmetic on the numbers you type.
Next tools
Drawdown simulator
How deep a normal losing run goes at your size.
Drawdown recovery planner
How long the climb back takes, and why sizing up backfires.
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.