[{"data":1,"prerenderedAt":1127},["ShallowReactive",2],{"\u002Fglossary\u002Fwhat-is-a-z-score-in-trading":3,"\u002Fglossary\u002Fwhat-is-a-z-score-in-trading-related":244},{"id":4,"title":5,"body":6,"category":228,"date":229,"description":230,"draft":231,"extension":232,"meta":233,"navigation":231,"path":234,"related":235,"seo":240,"stem":241,"term":242,"updated":229,"__hash__":243},"glossary\u002F5.glossary\u002Fwhat-is-a-z-score-in-trading.md","What Is a Z-Score in Trading? Streaks vs Chance",{"type":7,"value":8,"toc":220},"minimark",[9,13,18,26,37,45,48,70,77,81,90,98,106,109,113,136,152,156,176,183,187,213],[10,11,12],"p",{},"A z-score in trading measures whether wins and losses arrive in streaks or take turns, by counting the runs in the actual sequence and comparing that count with what chance would produce from the same wins and losses. It says nothing about whether the account made money, only whether one trade's outcome carried information about the next.",[14,15,17],"h2",{"id":16},"how-it-works","How it works",[10,19,20,21,25],{},"A ",[22,23,24],"em",{},"run"," is an unbroken block of same-sign results. The sequence W W L W L L has four runs. The statistic is the Wald–Wolfowitz runs test:",[27,28,33],"pre",{"className":29,"code":31,"language":32},[30],"language-text","Expected runs   R  = 2WL \u002F N + 1\nVariance        σ² = 2WL(2WL − N) \u002F ( N² (N − 1) )\nZ                  = (Runs − R) \u002F σ\n\nW = winning trades, L = losing trades, N = W + L\n","text",[34,35,31],"code",{"__ignoreMap":36},"",[10,38,39,40,44],{},"Trades are ordered by close time, and a trade counts as a win on its ",[41,42,43],"strong",{},"net"," result, with commission and swap already applied. A position that finished gross-positive and net-negative after costs is a loss here, and it breaks a winning run.",[10,46,47],{},"The sign is the reading:",[49,50,51,58,64],"ul",{},[52,53,54,57],"li",{},[41,55,56],{},"Negative z",": fewer runs than chance. Results cluster. Wins follow wins, losses follow losses.",[52,59,60,63],{},[41,61,62],{},"Positive z",": more runs than chance. Results alternate more than a coin would.",[52,65,66,69],{},[41,67,68],{},"Near zero",": indistinguishable from independent trades.",[10,71,72,73,76],{},"On the account page the score is followed by a percentage in brackets: the same score squashed onto a 0–100 scale, with ",[41,74,75],{},"50% meaning exactly as random as a coin",". Below 50% is streakier than chance, above 50% more alternating; a z of −2.41 shows as 8.24%, a z of +1.00 as 73.11%. It is a readable restatement, not a p-value, so 8.24% is not a significance level.",[14,78,80],{"id":79},"why-it-matters","Why it matters",[10,82,83,84,89],{},"Strategy statistics almost always assume trades are independent. When the z-score says otherwise, other numbers on the page quietly stop meaning what they appear to mean. Losses that cluster produce a deeper ",[85,86,88],"a",{"href":87},"\u002Fglossary\u002Fwhat-is-drawdown","drawdown"," than an equivalent win rate suggests, because drawdown depends on how the losses were arranged, not just how many there were.",[10,91,92,93,97],{},"A strongly negative score has a familiar source. Grid, averaging-down and basket systems open many positions around one idea and close them together, so a single decision emits a long block of same-sign results. Anything that scales into a losing position does the same, and the account that produces it usually also shows a wide gap between equity and ",[85,94,96],{"href":95},"\u002Fglossary\u002Fwhat-is-drawdown-on-balance","balance drawdown",".",[10,99,100,101,105],{},"A strongly positive score usually means the account is not running one sequence at all. Hedged pairs book a winner and a loser at the same moment, and two unrelated strategies interleaved on one login produce an artificial alternation belonging to neither. Where trades carry ",[85,102,104],{"href":103},"\u002Fglossary\u002Fwhat-is-a-magic-number","magic numbers",", reading each stream separately is the only way to get an honest score.",[10,107,108],{},"The practical use is narrow and real: a negative score is the statistical case for rules about consecutive losses, and a score near zero is the case against them.",[14,110,112],{"id":111},"what-the-data-shows","What the data shows",[10,114,115,116,119,120,123,124,128,129,132,133,97],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. The median published account has ",[41,117,118],{},"171 closed trades"," and a ",[41,121,122],{},"68.8%"," ",[85,125,127],{"href":126},"\u002Fguides\u002Fwin-rate-is-not-an-edge","win rate",", which puts about 118 wins against 53 losses. Chance predicts roughly ",[41,130,131],{},"74 runs"," from that mix, and one standard deviation is about ",[41,134,135],{},"5.6 runs",[10,137,138,139,142,143,146,147,151],{},"So on a median account the sequence has to collapse to about 63 runs, or stretch past 85, before the score reaches ±2. Anything between those bounds is consistent with a coin. That is a real constraint on the weight the number carries, and it tightens with history: the same pattern on 1,700 trades is a finding, on 171 it is a hint. It matters too that ",[41,140,141],{},"53.9%"," of these accounts are more than 90% automated and ",[41,144,145],{},"42.2%"," are under 10% — clustering is far more common in the first group, because ",[85,148,150],{"href":149},"\u002Fglossary\u002Fwhat-is-an-expert-advisor","a robot"," closing a basket writes several identical outcomes into the sequence at once.",[14,153,155],{"id":154},"where-you-see-it-on-showmytrades","Where you see it on ShowMyTrades",[10,157,158,159,162,163,166,167,170,171,175],{},"The metric appears in the ",[41,160,161],{},"Advanced Statistics"," module on every published account page as ",[41,164,165],{},"Z-Score (Probability)",", the score to two decimals with the mapped percentage beside it, in the ",[22,168,169],{},"Performance Metrics"," column alongside Profit Factor, Standard Deviation, Sharpe Ratio, Expectancy, ",[85,172,174],{"href":173},"\u002Fglossary\u002Fwhat-is-ahpr-and-ghpr","AHPR and GHPR",". The value is computed by our statistics service when the account syncs, not in your browser.",[10,177,178,179,182],{},"It also drives a line in the ",[41,180,181],{},"Smart Insights"," panel on the same page, where a score inside ±2 on an account with at least 30 closed trades is reported as a consistent trading pattern.",[14,184,186],{"id":185},"common-misunderstandings","Common misunderstandings",[49,188,189,195,201,207],{},[52,190,191,194],{},[41,192,193],{},"\"A negative z-score is bad.\""," It is not a quality measure. It describes dependence between trades and is silent on profitability. Plenty of good trend systems score negative.",[52,196,197,200],{},[41,198,199],{},"\"It predicts the next trade.\""," It summarises a sequence that already happened. Nothing in the runs test is forward-looking.",[52,202,203,206],{},[41,204,205],{},"\"The percentage is the chance the system works.\""," It is the score on a different scale, nothing more. Fifty per cent is the random midpoint, not a pass mark.",[52,208,209,212],{},[41,210,211],{},"\"Ordering does not matter.\""," It is the only thing that matters. Trades closing in the same second have no meaningful internal order, so basket-closing systems can move their own run count for reasons unrelated to the strategy.",[10,214,215,216,97],{},"For how many trades a statistic like this needs before it means anything, see ",[85,217,219],{"href":218},"\u002Fguides\u002Fhow-much-history-a-track-record-needs","how much history a track record needs",{"title":36,"searchDepth":221,"depth":221,"links":222},2,[223,224,225,226,227],{"id":16,"depth":221,"text":17},{"id":79,"depth":221,"text":80},{"id":111,"depth":221,"text":112},{"id":154,"depth":221,"text":155},{"id":185,"depth":221,"text":186},"Metrics","2026-08-19T00:00:00.000Z","A trading z-score compares the streakiness of wins and losses against chance. How our Z-Score (Probability) is computed, and why 171 trades is a thin sample.",true,"md",{},"\u002Fglossary\u002Fwhat-is-a-z-score-in-trading",[236,237,238,239],"what-is-ahpr-and-ghpr","what-is-drawdown-on-balance","what-is-a-magic-number","what-is-expectancy",{"title":5,"description":230},"5.glossary\u002Fwhat-is-a-z-score-in-trading","Z-Score","qO_QBoCenSAFLZuQeTpNFN9pheoSbRod7X9CqvXBYSY",[245,469,666,892],{"id":246,"title":247,"body":248,"category":458,"date":229,"description":459,"draft":231,"extension":232,"meta":460,"navigation":231,"path":103,"related":461,"seo":466,"stem":467,"term":374,"updated":229,"__hash__":468},"glossary\u002F5.glossary\u002Fwhat-is-a-magic-number.md","What Is a Magic Number in MT4 and MT5?",{"type":7,"value":249,"toc":451},[250,262,264,267,273,276,296,299,301,309,312,314,325,347,349,380,416,418,444],[10,251,252,253,256,257,261],{},"A magic number is an integer that an ",[85,254,255],{"href":149},"Expert Advisor"," writes onto every order it sends, and that ",[85,258,260],{"href":259},"\u002Fglossary\u002Fwhat-is-metatrader","MetaTrader"," carries for the life of the trade. It exists so that several strategies can share one account and still be told apart afterwards. Trades placed by hand carry zero.",[14,263,17],{"id":16},[10,265,266],{},"The number is a parameter of the order-sending call, set by the code, not by the broker or the platform.",[27,268,271],{"className":269,"code":270,"language":32},[30],"MT4:  OrderSend(symbol, cmd, lots, price, slip, sl, tp, comment, magic, ...)\nMT5:  request.magic = 55566;   → carried onto the position and every deal\nManual click:  magic = 0\n",[34,272,270],{"__ignoreMap":36},[10,274,275],{},"Three properties follow from that, and all three catch people out.",[49,277,278,284,290],{},[52,279,280,283],{},[41,281,282],{},"Nothing validates it."," No component checks the value for uniqueness or meaning. Two EAs configured with the same integer are merged permanently in the record, and each one will treat the other's positions as its own to manage.",[52,285,286,289],{},[41,287,288],{},"Zero is a real value, not an empty one."," It is what a manual click carries, and also what any EA whose magic input was never changed from its default carries, so the two become the same thing.",[52,291,292,295],{},[41,293,294],{},"It cannot be added later."," The value is fixed the moment the request leaves the terminal and stored with the trade; history that arrived as zero remains zero for good.",[10,297,298],{},"Other platforms express the same idea in a different field: a cBot on cTrader writes a text label, TradeLocker attaches a strategy id to the order, and a numeric one is read here as a magic number. In practice the per-strategy split is MT4 and MT5 territory.",[14,300,80],{"id":79},[10,302,303,304,308],{},"Run three strategies on one account and every headline number on the page is a blend. ",[85,305,307],{"href":306},"\u002Fglossary\u002Fwhat-is-a-profit-factor","Profit factor",", win rate, drawdown and the equity curve are all computed on the merged stream, so a strategy that loses steadily can sit inside a winning total for months without ever showing up as a line on any chart. The account looks healthy because, in aggregate, it is.",[10,310,311],{},"The magic number is the only field that survives that merge. Set properly, your history arrives already split into separate track records you can compare, size differently or retire one at a time. Set carelessly, no analysis performed afterwards can reconstruct it.",[14,313,112],{"id":111},[10,315,316,317,320,321,324],{},"This one field carries more weight here than most owners realise, because the automation figure on every account page is computed from it: a trade is counted as automated when it arrives with a non-zero magic number, or with a strategy label on the platforms that use one instead. Across the public accounts on ShowMyTrades with trading history (August 2026) the ",[41,318,319],{},"median autotrading share is 99%"," and ",[41,322,323],{},"53.9% of accounts are more than 90% automated",", which is the same statement as saying nearly every order on those accounts turned up already tagged.",[10,326,327,328,331,332,335,336,340,341,320,344,97],{},"The reason to label early is sample size. The ",[41,329,330],{},"median account has 171 closed trades",". Split across three strategies that is roughly fifty-seven each, below the point where ",[85,333,334],{"href":126},"a win rate"," or a profit factor carries information. Tagging from the first order is what gets each strategy to a readable sample before you have to make a decision about it. The alternative — ",[85,337,339],{"href":338},"\u002Fguides\u002Ftracking-multiple-accounts-portfolio","one account per strategy"," — is common here too: ",[41,342,343],{},"699 users run more than one account",[41,345,346],{},"429 across more than one broker",[14,348,155],{"id":154},[10,350,351,352,355,356,359,360,363,364,367,368,371,372,375,376,379],{},"The ",[41,353,354],{},"Breakdown Statistics"," module — listed as ",[22,357,358],{},"Currency Pair Statistics"," in your account settings — carries a ",[41,361,362],{},"By Magic Number"," tab next to ",[22,365,366],{},"By Symbol",", which appears as soon as the account has closed trades to break down. Each row shows ",[41,369,370],{},"EA \u002F Strategy",", the raw ",[41,373,374],{},"Magic Number",", trades, profit, and won\u002Flost counts with percentages. The row for magic 0 is labelled ",[41,377,378],{},"Manual",", and it is the one row that cannot be renamed: it is not a strategy, it is everything that arrived untagged.",[10,381,351,382,384,385,388,389,392,393,396,397,403,404,407,408,411,412,415],{},[41,383,370],{}," cell is editable in place, which is how 55566 becomes a name you will still recognise in six months. Those names then follow the data: the ",[41,386,387],{},"Closed Trades"," table under ",[41,390,391],{},"Trade History & Balance Progression"," offers a ",[41,394,395],{},"Magic"," column carrying the raw integer per ticket, and the ",[85,398,400],{"href":399},"\u002Fguides\u002Fcustom-analysis-and-filter-presets",[41,401,402],{},"Custom Analysis"," slideover has a ",[41,405,406],{},"Magic Numbers"," filter whose chips read ",[22,409,410],{},"Manual (0)"," or ",[22,413,414],{},"Label - 55566",". Select one and every statistic on the page is recomputed for that strategy alone.",[14,417,186],{"id":185},[49,419,420,426,432,438],{},[52,421,422,425],{},[41,423,424],{},"\"I will set magic numbers later.\""," Later does not exist. The field is written at order time and past trades cannot be re-tagged.",[52,427,428,431],{},[41,429,430],{},"\"My EA handles it automatically.\""," Only if the input was changed. A default of 0 is common and silently merges the EA with your manual trades.",[52,433,434,437],{},[41,435,436],{},"\"Manual means I traded by hand.\""," The manual row is the untagged bucket: hand-placed trades plus every EA left at zero.",[52,439,440,443],{},[41,441,442],{},"\"The magic number tells you which robot it is.\""," It tells you nothing. 55566 is whatever the author typed.",[10,445,446,447,97],{},"The full workflow, from naming a strategy to finding the one quietly losing money: ",[85,448,450],{"href":449},"\u002Fguides\u002Fmagic-numbers-and-strategy-labels","magic numbers and strategy labels",{"title":36,"searchDepth":221,"depth":221,"links":452},[453,454,455,456,457],{"id":16,"depth":221,"text":17},{"id":79,"depth":221,"text":80},{"id":111,"depth":221,"text":112},{"id":154,"depth":221,"text":155},{"id":185,"depth":221,"text":186},"Automation","A magic number is the integer an Expert Advisor stamps on every order it opens, so one account can hold several strategies and still be read one by one.",{},[462,463,464,465],"what-is-an-expert-advisor","what-is-metatrader","what-is-a-profit-factor","what-is-backtesting",{"title":247,"description":459},"5.glossary\u002Fwhat-is-a-magic-number","Ia1tACbSKWH8AUhr-ic4ZHFe0wTge4PR_HDhPLl1iSY",{"id":470,"title":471,"body":472,"category":228,"date":229,"description":657,"draft":231,"extension":232,"meta":658,"navigation":231,"path":173,"related":659,"seo":663,"stem":664,"term":174,"updated":229,"__hash__":665},"glossary\u002F5.glossary\u002Fwhat-is-ahpr-and-ghpr.md","What Are AHPR and GHPR? Formulas and the Gap",{"type":7,"value":473,"toc":650},[474,477,479,482,488,496,503,506,512,523,525,528,541,549,551,565,582,584,600,607,609,643],[10,475,476],{},"AHPR and GHPR are the average return of a single trade, expressed as a percentage of the capital standing before that trade: AHPR takes the arithmetic mean of those returns, GHPR the geometric one. They measure the same trades, answer different questions, and the distance between them reads how volatile the results were.",[14,478,17],{"id":16},[10,480,481],{},"Each closed trade gets a holding period return, its net result over the capital behind it:",[27,483,486],{"className":484,"code":485,"language":32},[30],"HPRᵢ = (profit + swap + commission)ᵢ \u002F Capital before trade i\n\nAHPR = ( Σ HPRᵢ \u002F N ) × 100\nGHPR = ( [ Π (1 + HPRᵢ) ] ^ (1\u002FN) − 1 ) × 100\n",[34,487,485],{"__ignoreMap":36},[10,489,490,491,495],{},"Costs sit inside the numerator: commission and ",[85,492,494],{"href":493},"\u002Fglossary\u002Fwhat-is-a-swap-in-forex","swap"," are folded into every trade before it becomes an HPR, so both figures are net.",[10,497,498,499,502],{},"One detail about the base matters. Our implementation seeds the running capital with the account's ",[41,500,501],{},"total lifetime deposits",", then rolls it forward by each trade's net result. On an account funded in instalments, early trades are measured against money that had not arrived yet, which drags both figures toward zero; on a single-deposit account the base behaves exactly as the formula reads.",[10,504,505],{},"GHPR is never above AHPR. That is arithmetic, not a property of trading: the geometric mean of positive numbers is at most the arithmetic mean, equal only when every number is identical. The shortfall is approximately half the variance of the returns:",[27,507,510],{"className":508,"code":509,"language":32},[30],"GHPR ≈ AHPR − σ² \u002F 2\n",[34,511,509],{"__ignoreMap":36},[10,513,514,515,518,519,522],{},"Two trades make the point. A +50% followed by a −50% gives an AHPR of exactly ",[41,516,517],{},"0%",", while the account sits at 0.75 of where it started. GHPR is √(1.50 × 0.50) − 1 = ",[41,520,521],{},"−13.4%",", which compounded twice lands precisely on that 0.75. The arithmetic mean describes a result nobody received; the geometric one reproduces the balance.",[14,524,80],{"id":79},[10,526,527],{},"You cannot spend an arithmetic mean. Only the geometric figure, raised to the number of trades, returns what the account actually did, which makes GHPR the number to quote and AHPR its yardstick. A wide gap between them is the volatility tax: what variance removes from compounding before it reaches the balance.",[10,529,530,531,535,536,540],{},"The asymmetry gets brutal at the tail. A single trade that removes the entire capital sets one factor in the product to zero, and a product with a zero in it is zero: GHPR reads −100% however good the preceding thousand trades were. That is the argument for ",[85,532,534],{"href":533},"\u002Fglossary\u002Fwhat-is-position-sizing","position sizing"," over win rate, restated as multiplication: a method with a healthy AHPR and enough ",[85,537,539],{"href":538},"\u002Fglossary\u002Fwhat-is-standard-deviation-in-trading","standard deviation"," to occasionally risk everything still has a negative geometric expectation.",[10,542,543,544,548],{},"AHPR is not decoration: it is per-trade ",[85,545,547],{"href":546},"\u002Fglossary\u002Fwhat-is-expectancy","expectancy"," restated as a percentage of capital rather than in pips or currency, which makes it comparable across account sizes. Read as a pair, the two say what the average trade earned and what was left of it after variance.",[14,550,112],{"id":111},[10,552,115,553,555,556,560,561,564],{},[41,554,118],{}," and a median ",[85,557,559],{"href":558},"\u002Fglossary\u002Fwhat-is-time-weighted-return","time-weighted return"," of ",[41,562,563],{},"+3.2%",". Spread that return evenly across that many trades and the geometric return per trade comes to about +0.018%, which the panel would round to +0.02%. That is an illustration, not a measured median, but it is the honest scale of these numbers and why they look underwhelming on almost every real account.",[10,566,567,568,560,571,574,575,577,578,581],{},"The same population has a median ",[85,569,570],{"href":306},"profit factor",[41,572,573],{},"1.28",", net of swap and commission, and a median win rate of ",[41,576,122],{},". A page can therefore carry ",[85,579,580],{"href":126},"a strong-looking win rate"," beside a GHPR barely off zero without contradiction. What matters is the sign, the gap to AHPR, and how many trades produced them.",[14,583,155],{"id":154},[10,585,586,587,589,590,320,593,596,597,599],{},"Both sit in the ",[41,588,161],{}," module on every published account page, labelled ",[41,591,592],{},"AHPR",[41,594,595],{},"GHPR",", at the foot of the ",[22,598,169],{}," column below Profit Factor, Standard Deviation, Sharpe Ratio, Z-Score (Probability) and Expectancy. Each prints as a signed percentage to two decimals, green at or above zero, red below.",[10,601,602,603,606],{},"The module has four views — Table, Weekday, Hourly and Duration. AHPR and GHPR live on the Table view; the other three show ",[22,604,605],{},"which"," trades produced the variance separating them. Both values are computed by our statistics service when the account syncs, not in your browser.",[14,608,186],{"id":185},[49,610,611,617,631,637],{},[52,612,613,616],{},[41,614,615],{},"\"AHPR is the average, so it is the honest one.\""," It is an average nobody earns. Whenever results vary it overstates compounded growth, by roughly half the variance.",[52,618,619,622,623,626,627,630],{},[41,620,621],{},"\"They are monthly or annual returns.\""," They are per trade. The same +0.02% means very different things at 20 trades and at 2,000, so read them next to ",[41,624,625],{},"Total Trades"," in the ",[22,628,629],{},"Trades"," column of the same module.",[52,632,633,636],{},[41,634,635],{},"\"A GHPR near zero means the system does not work.\""," At normal per-trade risk both numbers are small and the panel rounds to two decimals. An account showing +0.02% per trade over several hundred trades is up double digits.",[52,638,639,642],{},[41,640,641],{},"\"A positive AHPR with a negative GHPR is a bug.\""," It is the signature of large swings: returns can average above zero and still compound downward, which is the most useful thing this pair tells you.",[10,644,645,646,97],{},"For how per-trade figures fit into a record you intend to show other people, see ",[85,647,649],{"href":648},"\u002Fguides\u002Ftracking-trading-performance","tracking trading performance",{"title":36,"searchDepth":221,"depth":221,"links":651},[652,653,654,655,656],{"id":16,"depth":221,"text":17},{"id":79,"depth":221,"text":80},{"id":111,"depth":221,"text":112},{"id":154,"depth":221,"text":155},{"id":185,"depth":221,"text":186},"AHPR and GHPR are the arithmetic and geometric average return per trade. The formulas, why the geometric one is always lower, and thousands of accounts measured.",{},[239,660,661,662],"what-is-standard-deviation-in-trading","what-is-position-sizing","what-is-a-z-score-in-trading",{"title":471,"description":657},"5.glossary\u002Fwhat-is-ahpr-and-ghpr","qyQturGf725Un7ZAo6vvCR9Pw8KcwFNKhYfjLQIuylo",{"id":667,"title":668,"body":669,"category":881,"date":229,"description":882,"draft":231,"extension":232,"meta":883,"navigation":231,"path":95,"related":884,"seo":889,"stem":890,"term":685,"updated":229,"__hash__":891},"glossary\u002F5.glossary\u002Fwhat-is-drawdown-on-balance.md","What Is Drawdown on Balance? DD on Balance",{"type":7,"value":670,"toc":874},[671,690,692,695,701,704,707,710,736,738,741,748,753,766,768,794,807,809,825,839,841,867],[10,672,673,674,677,678,682,683,686,687,97],{},"Drawdown on balance is the deepest peak-to-trough fall an account's ",[41,675,676],{},"closed"," balance has ever taken, ignoring the unrealised profit and loss of open positions. It counts a loss only once realised, which makes it the more forgiving of the two drawdown figures on a ",[85,679,681],{"href":680},"\u002Fglossary\u002Fwhat-is-a-track-record","track record",". On ShowMyTrades it is published as ",[41,684,685],{},"DD on Balance",", always beside the equity-based ",[41,688,689],{},"Drawdown",[14,691,17],{"id":16},[10,693,694],{},"Both are worst-ever readings against the same high-water mark, drawn on balance. What differs is the value compared against it, and how often:",[27,696,699],{"className":697,"code":698,"language":32},[30],"Peak = high-water mark of closed balance, rescaled by every cash flow\n\nDD on Balance % = worst of (Balance − Peak) \u002F Peak × 100              at every trade\nDrawdown %      = worst of (min(Balance, Equity) − Peak) \u002F Peak × 100  once a day\n                  where Equity = Balance + floating P&L on open positions\n",[34,700,698],{"__ignoreMap":36},[10,702,703],{},"The balance rolls forward from the account's own history, every closed trade entering net of its commission and swap. The peak ratchets upward on trading gains and never falls on its own. Both are historical worsts, not today's position, so neither ever improves.",[10,705,706],{},"Cash flows are handled deliberately: a deposit or withdrawal scales the peak by exactly the factor it scales the balance, so money moving in or out neither creates a drawdown nor repairs one. Both are floored at −100%, so a balance driven below zero by a stop-out reads as a total loss.",[10,708,709],{},"Because the two share a peak, the pair reads as one measurement:",[49,711,712,718,724,730],{},[52,713,714,717],{},[41,715,716],{},"The two are close."," Positions are closed near where they went wrong. Little is being carried.",[52,719,720,723],{},[41,721,722],{},"Equity drawdown is far larger."," Losers are being held open. The account reports its losses late, and the balance figure is describing bookkeeping rather than risk.",[52,725,726,729],{},[41,727,728],{},"The two are identical."," Either no floating loss ever coincided with a high-water moment, or no floating history exists for that stretch.",[52,731,732,735],{},[41,733,734],{},"Balance drawdown is the larger one."," Usually the sampling gap: balance is checked at every trade, equity only on daily closing values, so a hole opened and refilled inside one day shows in the first and not the second.",[14,737,80],{"id":79},[10,739,740],{},"The gap between them is the clearest single tell for a system that never closes a loser. Grid, martingale and averaging-down strategies produce a smooth balance curve by construction: a position that is never closed never touches the balance. Their equity tells a different story, and it is the equity story that ends the account.",[10,742,743],{},[744,745],"img",{"alt":746,"src":747},"A smooth balance line beside an equity line pulled below it by open positions held at a loss","\u002Fimages\u002Farticles\u002Fequity-vs-balance.svg",[10,749,750],{},[22,751,752],{},"The gap between the two lines is the loss the balance figure has not been told about yet.",[10,754,755,756,760,761,765],{},"That is not interpretation. Margin is calculated on equity, so ",[85,757,759],{"href":758},"\u002Fglossary\u002Fwhat-is-margin-level","margin level"," and any ",[85,762,764],{"href":763},"\u002Fglossary\u002Fwhat-is-a-margin-call","margin call"," follow the equity line and ignore the balance line entirely. A record showing solid gains against a 3% balance drawdown next to a 45% equity drawdown is not a low-risk system: it was 45% underwater and had not admitted it. Where the two converge, that convergence is evidence in its own right — losses were taken when they occurred.",[14,767,112],{"id":111},[10,769,770,771,774,775,777,778,781,782,785,786,789,790,793],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Across the ",[41,772,773],{},"published accounts with trading history"," (August 2026), the median deepest ",[85,776,88],{"href":87}," is ",[41,779,780],{},"9.7%",". The tails are wide: ",[41,783,784],{},"38.5%"," of accounts have never been more than 5% below their peak, while ",[41,787,788],{},"38.2%"," have been more than 20% underwater and ",[41,791,792],{},"17.6%"," more than 50%.",[10,795,796,797,800,801,320,804,806],{},"That first group is where the pair earns its keep: a record under 5% is either tight risk control or a floating loss not yet realised, and the two look identical on a balance chart. Most of this population is automated — the median account runs ",[41,798,799],{},"99%"," of its trades through an ",[85,802,803],{"href":149},"automated system",[41,805,141],{}," are more than 90% automated — and a robot holding a loser neither tires nor loses its nerve.",[14,808,155],{"id":154},[10,810,811,813,814,626,816,819,820,824],{},[41,812,685],{}," sits directly under ",[41,815,689],{},[41,817,818],{},"Account Stats"," panel, on every published account page and in the ",[85,821,823],{"href":822},"\u002Fguides\u002Ftrading-widgets-and-embeds","Complete Dashboard widget",". Those two rows are the panel's whole risk block, set off by a rule with no heading above them. The value comes from our statistics service, computed over the account's synchronised history rather than entered by anyone, and printed without its minus sign.",[10,826,827,828,831,832,834,835,838],{},"Two other places on the page complete the picture. The ",[41,829,830],{},"Equity"," row shows equity as a percentage of balance — under 100% means open positions are underwater right now, and that shortfall is exactly what DD on Balance excludes. In the charts viewer, the ",[41,833,689],{}," view plots daily drawdown as bars over the account's life, making the ",[22,836,837],{},"duration"," of a decline visible rather than inferred.",[14,840,186],{"id":185},[49,842,843,849,855,861],{},[52,844,845,848],{},[41,846,847],{},"\"The lower number is the real risk.\""," The lower number is usually DD on Balance, and it is the optimistic one by construction.",[52,850,851,854],{},[41,852,853],{},"\"It excludes trading costs.\""," It does not. Every closed trade enters the balance with its commission and swap already applied.",[52,856,857,860],{},[41,858,859],{},"\"A withdrawal shows up as a drawdown.\""," It does not. A cash movement scales the high-water mark by the same factor as the balance. Deposits cannot mend a drawdown either.",[52,862,863,866],{},[41,864,865],{},"\"Both numbers see the same detail.\""," The equity figure is sampled once a day, so a fall and full recovery inside one session leaves no trace in it.",[10,868,869,870,97],{},"For the full method, including why depth and duration are separate questions, see ",[85,871,873],{"href":872},"\u002Fguides\u002Fmaximum-drawdown-explained","maximum drawdown explained",{"title":36,"searchDepth":221,"depth":221,"links":875},[876,877,878,879,880],{"id":16,"depth":221,"text":17},{"id":79,"depth":221,"text":80},{"id":111,"depth":221,"text":112},{"id":154,"depth":221,"text":155},{"id":185,"depth":221,"text":186},"Risk","DD on Balance is the deepest peak-to-trough fall in closed results only. How to read it against equity drawdown, and what published accounts show.",{},[885,886,887,888],"what-is-drawdown","what-is-maximum-drawdown","what-is-margin-level","what-is-absolute-gain",{"title":668,"description":882},"5.glossary\u002Fwhat-is-drawdown-on-balance","YNssKoit9sr03-dJpxHlpf4_3O1G9oJAiUxBNeg6S-M",{"id":893,"title":894,"body":895,"category":228,"date":229,"description":1120,"draft":231,"extension":232,"meta":1121,"navigation":231,"path":546,"related":1122,"seo":1124,"stem":1125,"term":1008,"updated":229,"__hash__":1126},"glossary\u002F5.glossary\u002Fwhat-is-expectancy.md","What Is Expectancy? Formula, Example, Real Data",{"type":7,"value":896,"toc":1113},[897,900,902,908,915,918,924,927,929,935,943,951,953,966,984,1002,1004,1016,1058,1076,1078,1107],[10,898,899],{},"Expectancy is the average result of a single trade, expressed in currency or in pips: what the account earns, on average, every time it opens a position. It is built from four numbers — win rate, average win, loss rate, average loss — and it answers \"does this system make money per trade\" in units you can multiply by a trade count. Positive expectancy repeated often enough is a business; negative expectancy is a countdown.",[14,901,17],{"id":16},[27,903,906],{"className":904,"code":905,"language":32},[30],"Expectancy = (Win Rate × Avg Win) − (Loss Rate × Avg Loss)\n\nLoss Rate = 1 − Win Rate\n",[34,907,905],{"__ignoreMap":36},[10,909,910,911,914],{},"A system that wins 40% of the time, makes $300 on a winner and loses $100 on a loser: (0.40 × $300) − (0.60 × $100) = $120 − $60 = ",[41,912,913],{},"+$60 per trade",". Four hundred trades a year is $24,000 of expected result, before position size changes and before anything goes wrong.",[10,916,917],{},"The same formula written in R multiples, where R is one average loss, strips out the account currency and makes systems comparable:",[27,919,922],{"className":920,"code":921,"language":32},[30],"Expectancy (R) = (Win Rate × Payoff) − (1 − Win Rate)\n\nPayoff = Avg Win \u002F Avg Loss\n",[34,923,921],{"__ignoreMap":36},[10,925,926],{},"Two things decide whether the output means anything. First, costs must already sit inside the inputs: spread, commission and swap come out of every trade, shrinking each winner and enlarging each loser. Second, the averages need enough trades that one outsized result cannot set them.",[14,928,80],{"id":79},[10,930,931,932,934],{},"Expectancy is the bridge between a statistic and a plan. ",[85,933,307],{"href":306}," tells you the ratio of money won to money lost; expectancy tells you what one more trade is worth, which is the number you multiply by frequency to get an expected month.",[10,936,937,938,942],{},"It also exposes the trade-off that a win rate hides. A win rate is only half of an edge — the other half is the ",[85,939,941],{"href":940},"\u002Fglossary\u002Fwhat-is-risk-reward-ratio","risk-reward ratio",", and expectancy is where the two meet. Move either one and the result moves; keep both and no amount of narrative changes it.",[10,944,945,946,950],{},"And it sets the cost floor. If a strategy expects +$8 a trade and the round-turn ",[85,947,949],{"href":948},"\u002Fglossary\u002Fwhat-is-a-spread","spread"," and commission cost $7, what is left is not a strategy.",[14,952,112],{"id":111},[10,954,955,956,959,960,119,963,97],{},"The figures below describe accounts published on ShowMyTrades, not traders in general. Take the middle of the published accounts that have trading history (August 2026): a ",[41,957,958],{},"median win rate of 68.8%",", a ",[41,961,962],{},"median profit factor of 1.28",[41,964,965],{},"median of 171 closed trades",[10,967,968,969,972,973,976,977,983],{},"Those numbers pin the expectancy of that middle account. Inverting the profit factor formula gives an average winner worth about ",[41,970,971],{},"0.58×"," its average loser, and the R form turns the rest into arithmetic: (0.688 × 0.58) − 0.312 = ",[41,974,975],{},"+0.087R",". Nine hundredths of one average losing trade, per trade taken. Over 171 trades the entire record adds up to roughly fifteen average losses' worth of profit — which is why the ",[41,978,979,980,982],{},"median ",[85,981,559],{"href":558}," is only +3.2%"," despite nearly seven trades in ten closing green.",[10,985,986,987,320,990,993,994,997,998,1001],{},"Costs are not a rounding error at that thickness. Published accounts have paid ",[41,988,989],{},"$4,782,670 in commissions",[41,991,992],{},"$862,547 in swap",", and ",[41,995,996],{},"86.3%"," of the accounts that carry swap at all pay net negative swap. At a ",[41,999,1000],{},"median trade length of 2.4 hours",", an edge of 0.087R survives only if the cost of a round turn stays small against the average loss.",[14,1003,155],{"id":154},[10,1005,1006,1009,1010,1012,1013,1015],{},[41,1007,1008],{},"Expectancy"," is a row in the ",[41,1011,161],{}," module on every published account page, inside the ",[22,1014,169],{}," group. It prints both units on one line — pips first, then account currency — because a pip figure travels between symbols and a currency figure travels between position sizes, and neither alone is complete.",[10,1017,1018,1019,1021,1022,1025,1026,1025,1029,320,1032,1034,1035,1041,1042,320,1045,1048,1049,1025,1052,320,1055,97],{},"Its four inputs are in the ",[22,1020,629],{}," group of the same module: ",[41,1023,1024],{},"Win Rate",", ",[41,1027,1028],{},"Avg. Win",[41,1030,1031],{},"Avg. Loss",[41,1033,625],{},", next to ",[41,1036,1037],{},[85,1038,1040],{"href":1039},"\u002Fglossary\u002Fwhat-is-average-trade-length","Avg. Trade Length",", which says whether a thin per-trade edge is being earned in hours or in weeks. The costs already deducted appear as ",[41,1043,1044],{},"Total Commissions",[41,1046,1047],{},"Total Swap Paid",", with the per-trade detail in the trades table under ",[41,1050,1051],{},"Profit (Gross)",[41,1053,1054],{},"Swap",[41,1056,1057],{},"Commission",[10,1059,1060,1061,1065,1066,1025,1069,320,1072,1075],{},"To test whether an expectancy is one edge or an average of several, the ",[41,1062,1063],{},[85,1064,402],{"href":399}," slideover recomputes the whole block on a filtered subset — by symbol, magic number, direction, date range, weekday or hour — and Advanced Statistics adds ",[22,1067,1068],{},"Weekday",[22,1070,1071],{},"Hourly",[22,1073,1074],{},"Duration"," views that split the same result without any filtering.",[14,1077,186],{"id":185},[49,1079,1080,1089,1095,1101],{},[52,1081,1082,1085,1086,1088],{},[41,1083,1084],{},"\"Positive expectancy means I will make money.\""," It means the average trade is profitable. Size the positions wrong and a positive-expectancy system still ends at zero: survival is a ",[85,1087,534],{"href":533}," question, not an expectancy one.",[52,1090,1091,1094],{},[41,1092,1093],{},"\"Expectancy is just my average trade.\""," Only if the average is taken net. Computed on gross profit it ignores commission and swap, which is exactly where thin edges disappear.",[52,1096,1097,1100],{},[41,1098,1099],{},"\"A high win rate implies positive expectancy.\""," It implies nothing on its own. At a 0.58 payoff, a 60% win rate is a losing system.",[52,1102,1103,1106],{},[41,1104,1105],{},"\"The number is stable.\""," On a few hundred trades it is not. One outsized winner can lift a whole record's expectancy, and removing it is a fair test.",[10,1108,1109,1110,97],{},"For the metrics worth tracking over time and the order to read them in, see ",[85,1111,1112],{"href":648},"the guide to tracking trading performance",{"title":36,"searchDepth":221,"depth":221,"links":1114},[1115,1116,1117,1118,1119],{"id":16,"depth":221,"text":17},{"id":79,"depth":221,"text":80},{"id":111,"depth":221,"text":112},{"id":154,"depth":221,"text":155},{"id":185,"depth":221,"text":186},"Expectancy is the average profit or loss of one trade: (win rate × avg win) − (loss rate × avg loss). The formula, a worked example, and public accounts.",{},[464,1123,661,885],"what-is-risk-reward-ratio",{"title":894,"description":1120},"5.glossary\u002Fwhat-is-expectancy","U6yMG7Etb-uidsGFxazRu_6VJh-bM41wGZNqkAU1r7Q",1787415687209]