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Trading guides & research

Each guide answers one question and hands you the calculator that does the arithmetic. Each study states what was asked, how it was measured and what came back. Every one takes a position in its first line.

Everything, newest thinking first

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Guide How to Read Candlestick Charts A candle encodes four prices and nothing else. What it shows, what the proportions mean, and the one thing it cannot tell you. Read → Guide How to Calculate Position Size Fix the loss first, then divide by the stop distance. Everything else is arithmetic. Read → Guide How Much Should You Risk Per Trade? Between 0.25% and 2% for most systematic traders, and the number follows from drawdown tolerance rather than confidence. Read → Guide What Is a Good Risk/Reward Ratio? There is no good ratio in isolation. A ratio is only good relative to the win rate it needs to break even. Read → Guide How Trading Expectancy Works Expectancy is the average outcome per trade. It is the only number that says whether a strategy earns anything. Read → Guide How Drawdown Affects Recovery A 20% loss needs 25% to recover, a 50% loss needs 100%. The asymmetry is the whole argument for small size. Read → Guide How to Calculate Risk of Ruin Ruin is a function of risk per trade, win rate and payoff. At 2% per trade a normal losing run is survivable; at 10% it is not. Read → Guide ATR vs Fixed Stop Losses A fixed stop changes your risk every time volatility changes. An ATR stop keeps the risk fixed and moves the size instead. Read → Guide How to Backtest a Trading Strategy Write the rule so a computer cannot misread it, hold back data you never look at, and expect most versions to fail. Read → Guide Does Win Rate Actually Matter? Less than traders think. A 35% win rate at 1:3 beats a 65% win rate at 1:1, and both beat a high win rate with no stop. Read → Research Do Candlestick Patterns Work? What Is and Is Not Published The honest answer changed on 2026-09-06: the measured run was computed on a superseded engine and has been withdrawn rather than published with a caveat. What each page still carries is the rule, its thresholds and the conditions that invalidate it. Read → Research Candlestick Pattern Statistics: Occurrence by Formation How often a formation appears is a property of the thresholds used to detect it, which is why published counts for the same pattern differ by multiples. Read → Research Most Reliable Candlestick Patterns: What the Data Shows The ranking exists, but the gaps between the top entries are smaller than their confidence intervals. Read → Method Candlestick Patterns Backtested: Full Method and Limits Detection rules, six exit rules, the conditioning grid, the sample floor, and what the test cannot tell you. Read → Research Candlestick Patterns for Day Trading: What Changes Intraday Shorter bars make the close an artifact of the clock, costs a larger share of each move, and the still-forming bar a trap that has already invalidated one study here. Read → Research Does Technical Analysis Work? A Testable Question Some of it is measurable and some of it is not defined precisely enough to test. We publish which is which. Read →

How these are organised

Three groups, and the difference between them is not the topic but how much of the answer is decidable.

Group	What can be settled
Risk and position sizing	Entirely. These are arithmetic — the answer is derivable and does not depend on any market behaving a particular way
Method	Mostly. What makes a test trustworthy is a matter of design rather than of results
Candlesticks and patterns	Partly. The rules and their invalidation conditions are published; the measured outcomes are withheld while the study is re-run

The first group is where almost all of the practical value sits, and it is the group that requires no research to be finished. Position size, expectancy and the drawdown arithmetic decide more outcomes than any pattern does, and all three are settled by you rather than by the market.

Every figure here is derived, not asserted

Each guide shows the formula, works an example through it with numbers you can check on the matching calculator, and states what the arithmetic ignores. Where a claim depends on a measurement, it says which measurement and whether it is currently published.

Worth knowing

None of these guides quotes a hit rate for a candlestick formation, because none is currently publishable. The run that would supply one was computed on a superseded engine and withdrawn rather than published with a caveat.

Where to start, if you are starting

In this order, because each one is an input to the next and reading them out of order makes the later ones look arbitrary:

How to calculate position size — the one formula that decides more outcomes than any other.
How much should you risk per trade — what number to put into it, and the losing-streak arithmetic behind the answer.
How trading expectancy works — whether a strategy earns anything, which win rate alone cannot tell you.
How drawdown affects recovery — why the first two matter more than any entry signal.

What a guide here has to contain

Every one follows the same shape, and the shape is the point rather than a house style.

The formula, written out. Not described — stated, so it can be evaluated by hand.
A worked example using numbers that match the calculator the guide links to, so the two can be checked against each other.
What it assumes, including the assumptions that make the answer optimistic. Risk of ruin assumes independent trades and a known win rate; both fail in the same direction.
Where it goes wrong, which is usually the most useful part and the part most guides omit.

Questions these deliberately do not answer

Three come up constantly and are absent on purpose, because answering them well is not possible and answering them badly is easy.

Question	Why it is not answered
Which strategy should I trade	It depends on capital, horizon and what you can hold through a losing run — none of which a page can know
What is the best indicator setting	Any specific answer is a parameter chosen on someone else's data, which is the definition of overfitting
Should I take this trade	A calculator can price a trade. Whether the setup is worth taking is not arithmetic

What the guides do instead is make the arithmetic explicit enough that you can answer those yourself, and see what your answer depends on.