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Monte Carlo Simulation Explained; The Ultimate Guide

As a trader, you probably noticed understand that markets change from time to time. For example, during the summer we often see that the markets are quieter and during the fall we usually get some more volatility. It’s important for you to adapt to these changes A good trading strategy can withstand these changes in the markets. But how do you know if your trading strategy is good and robust enough? That’s exactly where a Monte Carlo simulation can help. Apart from using your historical data to learn more about your trading performance, you can perform a Monte Carlo Simulation formula to get an idea of how your strategy might perform in the future. In this article guide, I’m going to try to explain the Monte Carlo Simulation for you so, in the end, you know how you can use it to analyze and improve your trading results

What Is Expectancy Ratio?

If you are looking to increase the amount of profit you are making from your trades and are failing to understand why you may not be, knowing the expectancy ratio of a trade before you make it can help. In this post, we'll look at the expectancy ratio and explain how to calculate it and why you should perhaps look at it.

What is payoff ratio ?

There are so many trading metrics out there that it is hard to understand them all. Yet as we have shown on this blog some of them are very important and can help you to analyze and improve your trading performance. Today we are going to look at the payoff ratio. It’s a little bit less known, but does this mean it’s a hidden gem? In this article, I will try to explain what the payoff ratio is, how to calculate it, and if it's useful.

The Risk of Ruin (and why you should know yours)

When you trade financial markets there’s always a risk of losing money. Traders who fail to use proper risk and money management might end up losing a huge amount of money or blowing up their accounts But what if you actually try hard to use proper and good risk management, then what’s the change you might blow up your account in the end after all ? The answer might surprise you and your risk of ruin might be higher than you think. In this post I am going to try to break down the Risk of Ruin for you. Hopefully after reading this article you have a better understanding what the Risk of Ruin is, why it’s important to know your own and how you can calculate it and improve it.