Expected Value & Edge

How win rate and payoff combine into expected value, what a trading “edge” really is, and why a strategy can win less than half the time and still make money.

Thinking in probabilities

No trader knows how any single trade will turn out. What skilled traders do know is roughly how their strategy performs over many trades. Expected value (EV) turns that knowledge into one number: the average amount you can expect to gain or lose per trade over the long run. It connects risk and return directly.

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