Evaluating trade setups based on potential upside versus downside.
This scope is designed to help you build a practical understanding of Risk / Reward Analysis. Lessons move from core definitions to real-world context and common failure points.
Reading in order is recommended, but each lesson stands on its own.
A clear explanation of risk/reward, why it matters for capital protection and long-term survivability, and how to evaluate it realistically in trading decisions without making predictions or recommendations. Includes practical examples and common pitfalls.
A clear, academically grounded explanation of risk/reward ratios, how they shape trade expectancy, and why they are central to protecting capital and maintaining long-term survivability in markets. Includes practical examples and common pitfalls to avoid.
Win rate by itself tells little about the quality of a trading approach. Without the size of winners and losers, and the variability of outcomes, a high hit rate can hide poor risk control and negative expectancy. This article explains how payoff size, costs, and path risk determine survivability far more than win rate alone.
Positive expectancy is the statistical foundation of risk control. This article defines expectancy precisely, shows how it connects to risk and reward, clarifies why it protects capital over time, and addresses common misconceptions that often undermine long-term survivability.
An academically grounded explanation of asymmetric risk profiles, why they matter for capital protection and survivability, how they appear in trading practice, and how to diagnose pitfalls that erode asymmetry over time. The discussion emphasizes expectancy, distribution shape, and path dependency without making market predictions or recommendatio…
A disciplined introduction to the downside-first mindset in risk management, explaining how to frame potential loss before potential gain, why this protects trading capital, and how to apply the concept with realistic constraints and data-driven checks.
A rigorous explanation of how risk and reward behave across multiple timeframes, why the distinction matters for capital protection, and how to think about real trading scenarios without mixing horizons or diluting risk discipline. Includes practical examples and common pitfalls.
An in-depth examination of risk/reward and trade selection, showing how expectancy, position sizing, and realistic outcome distributions protect trading capital and support long-term survivability without relying on predictions or specific setups. Arguing for structured decision filters and rigorous measurement over intuition.
A rigorous explanation of how slippage alters planned risk, compresses reward, raises the break-even win rate, and affects long-term survivability. Includes definitions, mechanisms, examples, and common pitfalls in real trading environments without offering trade recommendations.
A rigorous explanation of how risk/reward analysis functions in trending markets, why it is central to capital protection and long-term survivability, and how to recognize common pitfalls when trends accelerate, stall, or reverse suddenly. The discussion emphasizes definitions, scenario thinking, and practical measurement without prescribing specif…
