Hey,

Quick one this week, and it's the idea I wish someone had drilled into me early.

You can win 70% of your trades and still go broke. You can win 30% and get rich. The reason is a single number that most retail traders never actually compute: expected value.

Here's the whole thing in one coin flip. Say a fair coin pays you $11 on heads and costs you $10 on tails. Win rate: 50%. EV per flip: +$0.50. Now flip the payouts — win $10, lose $11. Same 50% win rate, but EV is −$0.50. Identical odds of being right, opposite destiny. Win rate told you nothing. The size of wins versus losses told you everything.

That's why a trend follower can lose two out of three trades and still crush it (small losses, occasional huge winner), while the naked-option seller who wins 9 out of 10 quietly runs negative EV until one move erases a year.

The formula is just four numbers: (probability of winning × average win) − (probability of losing × average loss). If someone quotes you a win rate without the other three, they've shown you a quarter of the picture.

This is educational commentary, not personalized financial advice — a framework for your own decisions, not a set of picks.

What a disciplined trader does with it: Before entering, they write down the four numbers — rough probability, target win, defined loss. If they can't estimate them, the trade is a guess, not a position. Then they size so that ten losses in a row is annoying, not fatal (often 0.5–2% of the account per trade). Positive EV is necessary, but survival is what lets the average show up. Bet the whole account on a +EV edge and one bad streak still takes you to zero.

The shift that changes everything: stop asking "was I right?" and start asking "was that a good bet?" You control the decision. You don't control the outcome.

Full walkthrough with all the math here: https://youtu.be/04xvX3GVBew

Run your own numbers, Paragon Signals