Merge pull request #3203 from jpribyl/update_expectancy_docs
Update wording in expectancy docs and add example
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@ -79,7 +79,7 @@ So lets say your Win rate is 28% and your Risk Reward Ratio is 5:
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Expectancy = (5 X 0.28) – 0.72 = 0.68
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Expectancy = (5 X 0.28) – 0.72 = 0.68
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```
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```
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Superficially, this means that on average you expect this strategy’s trades to return .68 times the size of your loses. This is important for two reasons: First, it may seem obvious, but you know right away that you have a positive return. Second, you now have a number you can compare to other candidate systems to make decisions about which ones you employ.
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Superficially, this means that on average you expect this strategy’s trades to return 1.68 times the size of your loses. Said another way, you can expect to win $1.68 for every $1 you lose. This is important for two reasons: First, it may seem obvious, but you know right away that you have a positive return. Second, you now have a number you can compare to other candidate systems to make decisions about which ones you employ.
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It is important to remember that any system with an expectancy greater than 0 is profitable using past data. The key is finding one that will be profitable in the future.
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It is important to remember that any system with an expectancy greater than 0 is profitable using past data. The key is finding one that will be profitable in the future.
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