Edge Finder

The Edge Reality Check

This tool reveals your true expected value per trade after accounting for win rate, risk %, reward ratio, and commissions. In options trading, understanding your edge is critical because:

• Risk % makes sizing concrete - 2% risk on $10k means $200 at stake per trade
• Reward/Risk ratio shows payoff structure - A 1.5:1 ratio means aiming for $300 gain on $200 risk
• Most traders overestimate their win rate due to cognitive biases and selective memory
• Commissions and slippage erode edges that might look profitable on paper
• Options add complexity with time decay and volatility factors that most retail traders ignore

How to use: Enter your realistic win rate (based on actual trades), risk per trade as a percentage of your account, your typical reward/risk ratio, and your average commission. Click calculate to see your true expected value per trade.

Antifragile insight: Positive expected value alone doesn't guarantee survival. You need proper position sizing and risk management to withstand the inevitable losing streaks that even the best strategies encounter.