Hi traders,
What expectancy ratio do you think is adequate for trading?
it depends on the trading frequency, clearly
which would you prefer, yourself: a method with an expectancy ratio of +0.1 which presents about ten trading opportunities per day, or one with an expectancy ratio of +0.2 which only gives you one trade per week? that’s (deliberately) an extreme pair of examples, to illustrate the point, but i’m sure you see what i mean? an expectancy ratio on its own doesn’t mean much, does it?
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Expectancy adds the element of probability rather than just using risk reward ratio. It is helpful to see if your method is profitable if the expectancy is positive.