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Trading Systems Academy / Module 6 / 38
MODULE 6 · PERFORMANCE, STATISTICS & VALIDATION

Normalize Results by the Risk Taken

The source's risk-based accounting makes R a useful common unit. A loss at the planned stop is approximately -1R, while a target three times the initial risk is approximately +3R before execution costs and deviations.

ACADEMY #38PERFORMANCE ANALYTICSSYSTEM VALIDATION

Validation principle

Using R allows trades with different instruments, stop distances and position sizes to be compared on the same risk scale. Monetary profit alone can hide whether a larger result simply came from taking more risk.

ENGINEERING TRANSLATION

The journal should store initial monetary risk, planned R target, realized P/L and realized R. This creates a consistent performance layer above Forex lots, gold contracts and crypto units.

TRADES → R-MULTIPLES → EXPECTANCY → DRAWDOWN → CONTEXT → ERROR CLASSIFICATION → VALIDATION GATE

Connected FX Nova modules

Educational software-engineering material. Source-specific numerical rules are identified as methodology rules; production thresholds require independent testing and sufficient data.

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