Trading Risk & Expectancy Guides
Plain-language guides to the maths behind the calculator: expectancy, win rates, position sizing, drawdown, losing streaks, risk of ruin and more. Each guide has worked examples, and a button that opens the calculator with matching settings so you can test the numbers yourself.
Trading Expectancy Explained
What expectancy is, how to calculate it in R, and why a 70% win rate can still lose money.
Read the guideBreak-Even Win Rate by Risk-to-Reward Ratio
The win rate you need to break even at each risk-to-reward ratio, and how costs move the line.
Read the guidePosition Sizing: How Much to Risk Per Trade
Calculate position size from risk percentage and stop distance, with a worked forex example.
Read the guideDrawdown and Recovery Math: Why a 50% Loss Needs a 100% Gain
Why a 50% loss needs a 100% gain to recover, and how streaks turn into drawdown.
Read the guideLosing Streaks in Trading: Probability and How to Survive Them
How likely losing streaks really are, how long the longest one tends to be, and what it costs.
Read the guideRisk of Ruin in Trading: How Position Size Decides Survival
The odds of blowing up an account or hitting a loss limit, and how risk per trade drives them.
Read the guideFixed vs Compounding Risk: Which Grows an Account Faster?
How fixed-dollar and percentage risk differ in growth, drawdown and simplicity.
Read the guideWin Rate vs Risk-to-Reward: Which Matters More?
Which matters more for results, and why the right answer is the combination.
Read the guideAll guides are educational. Nothing here is financial advice or a trade signal.