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Module 12 · Reviewing Performance

12.1The Metrics That Matter

What you will learn
  • ·Which metrics describe a system
  • ·What each metric reveals
  • ·Why sample size matters
Core content
  • ·win rate
  • ·average win and average loss
  • ·expectancy
  • ·maximum drawdown
  • ·number of trades (sample size)
  • ·rule-adherence rate

Win rate alone describes very little without average win and average loss.

TLHQ insight

Expectancy, not win rate, describes a system.

Example

A 35% win rate with an average win three times the average loss can be strongly profitable.

Examples use historical or illustrative data only. They are not live market signals.

Apply it

Calculate expectancy over your last thirty recorded trades.

Knowledge check
Check 01 · choice

Win rate alone is insufficient because it ignores:

Check 02 · truefalse

A low win rate strategy can be profitable.

Key takeaways
  • 01Track expectancy, not just win rate.
  • 02Sample size determines confidence.
  • 03Rule adherence is a metric.
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Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.