What's your Edge

R

Rapunzel

Hi Folks, I hope you are all well and good.

I was just curious to ask; if you would willing to share the percentage edge you currently work with on your best strategy. Just so people can have a rough idea of what a reasonable edge looks like.
 
I should have added one too :), keep on posting!!

On a breakout with R:R 1 (TP) :2 (SL) , I would need to win at least 66.67% of my trades to break even. Win rates are currently in the range 80 ~ 85% so my edge would be

85% - 66.67% = 18.33% Edge.

Example Calculation

If I enter 200 trades a year and risk £10,000 to make £5,000 on each trade, the run rate return should be:

[5,000 * (200 * 0.85)] - [10,000*(200*0.15)] = 850,000 - 300,000 = 550,000

Assuming 10,000 is 2.5% of my account balance (400,000), then the annual growth should be 550,000/400,000 = 1.375 assuming no withdrawals.

edit: 950,000/400,000 = 2.375
 
Last edited:
Rapunzel said:
I should have added one too :), keep on posting!!

On a breakout with R:R 1 (TP) :2 (SL) , I would need to win at least 66.67% of my trades to break even. Win rates are currently in the range 80 ~ 85% so my edge would be

85% - 66.67% = 18.33% Edge.

Example Calculation

If I enter 200 trades a year and risk £10,000 to make £5,000 on each trade, the run rate return should be:

[5,000 * (200 * 0.85)] - [10,000*(200*0.15)] = 850,000 - 300,000 = 550,000

Assuming 10,000 is 2.5% of my account balance (400,000), then the annual growth should be 550,000/400,000 = 1.375 assuming no withdrawals. And from there i can calculate the sharp ratio.
More...

Every trader does that calculation lol.
 
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