Same edge. Very different results.
Give 40 traders exactly the same strategy and the same odds. Watch how different their results look, then find out how many trades it takes before you can tell skill from luck.
Free, with no sign up, and nothing you enter leaves your device. It is a simulation with fixed odds, so it shows how luck behaves, not how your market behaves.
40 traders, same edge, 100 trades each
A good week doesn’t prove an edge, and a bad month doesn’t disprove one.
Over a small number of trades, luck swamps skill. That is why judging yourself on the last few results feels so convincing and tells you so little. Whether you followed your rules is the part you can judge today.
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Now test your own record
Enter how many trades you have taken and what you made in total, in R. We then ask how many traders with no edge at all would have done at least this well by luck.
A winner that made twice your risk is +2R, and a full loss is −1R. This uses the winner-to-loser ratio you set above, which is 1.5R.
What to do with this
You can’t speed up how long luck takes to average out. You can change what you judge yourself on while it does.
Judge the process first
Over a few dozen trades the result is mostly luck. Whether you followed your rules is the part you control, and the part you can judge right now.
Count trades, not days
A good week or a bad month is a handful of trades. Judge a method over trades, and keep taking the same one while the sample builds.
Keep one honest record
Every trade goes in, including the ones you would rather forget. The free Weekly Plan has a Friday review to keep it in front of you.
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Every Monday you get my higher-timeframe overview of where the market sits going into the week, with the week's calendar linked in it. Nothing you entered here is sent anywhere. The email is where you hear about new tools like this one.
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Continuum Community works through the week together: the market context, the process work, and exercises like this one. Continuum Education is the full process in one place, as a one-time purchase with lifetime access.
The research behind it
- Tversky, A., and Kahneman, D. (1971). Belief in the law of small numbers. Psychological Bulletin, 76(2), 105-110.
- Lo, A. W. (2002). The statistics of Sharpe ratios. Financial Analysts Journal, 58(4), 36-52.
Edge or Luck is an educational tool. It is not trading advice. The simulation gives every trade the same fixed odds and treats trades as independent of each other, and real markets are messier. The number of trades needed uses a standard 95% confidence rule on the average result per trade. Trading involves risk, and you should only trade with money you can afford to lose.
