"Positive expectancy" refers to the belief or expectation that something will have a favorable outcome or result. It is having a positive outlook or confidence that things will turn out well.
Full definition
In the event that your risk doubles, the ratio falls to 2.5, which requires only a win rate of above 29 % to
produce positive expectancy.
This positive relationship between net profit and cumulative loss is true for a large sample of trades that follow a trading method
with positive expectancy.
It is a low probability bet that has
positive expectancy, and it's a bet you should take every time.
In any case, the strategy has
a positive expectancy and will be profitable over a large number of trades.
We just need practical and reliable targets to offer
us the positive expectancy we need.
Ask yourself what is
the positive expectancy of bonds going forward?
Work out a trading method with
positive expectancy.
You HAVE to let winning trades run, in order to achieve
the positive expectancy that a solid trend following approach can give you.
So, once you have a basic method that demonstrates
a positive expectancy (be it trend following or any other approach) with good risk control, then from that point it comes down 100 % to controlling your mindset.
Over time, if the approach has
positive expectancy, you will have profits to show for it.
From your analysis, you need to have an entry and exit plan that offers
you positive expectancy trades.
Targets, stop - losses and your overall assessment of the market bias should be assessed as a whole in order to find trading opportunities with
positive expectancy.
To be profitable, all you need to have is
a positive expectancy.
Now a few years later, I'm trading with
a positive expectancy.
Notice how Ryan was able to generate
a positive expectancy despite losing more trades than he wins.
This article, as far as I am concerned, covers the most important concept in trading for both the pros and newbies provided one understands how and why markets move the way they do and why we need a proven trading strategy (proven by the trader over a series of trades) with
a positive expectancy.
One of the most important lessons in this book are his explanations of creating the right risk / reward ratios at entry through comparing your stop loss to your potential upside profits without
a positive expectancy nothing will work.
As for the other two indicators, one helps to determine if a time frame is suitable for price action analysis; the other one helps you to assess if a trade has
positive expectancy.
When the reader knows you have earned a relevant credential, you set up
a positive expectancy.
In another study of married couples,
positive expectancies were associated with higher levels of relationship satisfaction initially, but led to lower satisfaction among husbands and wives who carried on criticizing each other.