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Advanced15 papers75 minCertificate$13

The Arithmetic of an Account

The numbers a professional quotes about their own trading, each worked out by hand — and the percentages that quietly lie to you.

Who it is for
A reader who wants to say how good their trading is in numbers someone else would accept.
Before you start
Position Size and the 1% Rule.
Start the courseBuy this course — $13

Opens with Premium, or buy the course on its own.

You will be able to

  • Work out a win rate, an average win and an average loss from a list of trades
  • Say the win rate a strategy needs to break even at its risk-to-reward
  • Calculate expectancy, and say what it means per trade
  • Read a profit factor and a maximum drawdown together, not separately
  • Explain why a 50% loss needs a 100% gain, and what that does to compounding
  • Say what a Sharpe ratio is measuring, in plain words

15 papers

A short quiz after every paper; the next paper opens when you pass it.

  1. Unit 1

    The four numbers

    1. 01What Is Win Rate5 min
    2. 02How to Calculate Average Win and Average Loss5 min
    3. 03What Is Break-Even Win Rate5 min
    4. 04How to Calculate Expectancy5 min

  2. Unit 2

    Grading a record

    1. 05What Is Profit Factor5 min
    2. 06How to Calculate Maximum Drawdown5 min
    3. 07What Is a Recovery Factor5 min
    4. 08How to Read an Equity Curve5 min

  3. Unit 3

    Percentages that lie

    1. 09How to Calculate Percentage Gain and Loss Correctly5 min
    2. 10Why a 50% Loss Needs a 100% Gain5 min
    3. 11What Is Compounding5 min
    4. 12How to Turn Monthly Into Yearly Returns5 min

  4. Unit 4

    The numbers funds quote

    1. 13What Is the Sharpe Ratio, in Plain Words5 min
    2. 14What Is Standard Deviation, in Plain Words5 min
    3. 15What Is Return on Investment in Trading5 min