Mark Minervini

Evaluate edge by combining your win rate with average win and loss sizes to determine overall expectancy.

Emphasis on focusing trading approach to maximize returns quickly and, crucially, consistently.

Specifies preferred risk-reward targets (3:1, example 15% gain vs 5% loss).

Advocates reusing the favorable risk-reward bets frequently to compound returns.

Reduces realized upside and undermines the intended risk-reward relationship

Erodes the positive edge and can turn a profitable strategy into a losing one

Design trades with a favorable profit-to-risk ratio (preferably 3:1, minimum 2:1) so average winners outweigh losers.

Small controlled losses and larger, less-frequently captured gains can produce outsized returns even with modest win rates.

Connects win rate (around 50%) with the need to manage gain capture and loss containment to create an edge.

Repeat favorable bets often to compound the edge; more iterations of a positive expectancy improve returns.

Average profit per trade computed from win rate and win/loss sizes; positive expectancy yields long-term profit.

Contain losses quickly while allowing gains to develop so the upside is captured without excessive drawdown.

Make a trading approach that you can repeat consistently; consistency is the primary goal.

Keeps losses contained so winners can outweigh losers under a favorable R:R

Achieves a 3:1 reward-to-risk ratio when paired with a 5% stop, creating positive expectancy

Compounding the edge by taking many independent positive-expectancy bets increases returns