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The Trading Edge

Concepts, risk frameworks, and psychology for traders who measure edge with data. No hype: sample-size discipline and explicit limits on what the numbers can claim.

Reference

Trading Glossary

Plain-English definitions: profit factor, expectancy, R-multiple, trailing drawdown, FIFO, VWAP, and more.

Latest·Trading Concepts·7 min read

Limit Orders and Market Orders: Fill Certainty and Risk

A market order guarantees a fill but not a price; a limit order guarantees a price but not a fill. How the two order types trade certainty against price risk.

Trading Concepts

Average True Range: How to Size a Stop With ATR in Futures

Average true range averages a bar's range to size a volatility-scaled stop. Set the stop as a multiple of ATR, then size the position to a fixed dollar risk.

7 min read

Trading Concepts

R-Multiple in Futures Trading: How to Express a Trade in R

R-multiple expresses any trade's outcome as a multiple of the dollar amount you risked on that trade. Compute it from your plan and run a trade log in R.

7 min read

Trading Concepts

What Is Realized and Unrealized P&L in Futures Trading?

Realized P&L is the settled cash from closed futures trades. Unrealized P&L is the mark-to-market value of open positions. Why the difference matters.

7 min read

Trading Concepts

What Slippage Is and How It Differs From Commission

Slippage is the gap between expected fill and realized fill. Commission is a fixed per-trade charge. See how each is measured and why they show up separately.

7 min read

Trading Concepts

What Is a Tick in Futures Trading? Tick Size and Tick Value

A tick is the smallest legal price increment a futures contract can move. Learn how tick size and tick value differ, with worked CME contract examples.

7 min read

Trading Concepts

What Is Expectancy in Trading and How to Calculate It

Expectancy is the average dollar gain per trade across your trade log. Learn how to calculate expectancy from your own history and what the number means.

7 min read

Trading Concepts

What Is Profit Factor and Why Every Trader Should Track It

Profit factor is the ratio of gross profit to gross loss. Learn how to calculate it, what a good profit factor looks like, and why it matters more than win rate alone.

5 min read