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Edge Convergence Calculator
Every viral post about Renaissance Technologies tells you three formulas made $100 billion. None of them tell you the hard part: your edge is an estimate, costs eat it, and it takes far more trades than you think before you can tell edge from luck. This calculator does that math honestly.
Your System
Measured across your last 100+ trades of this exact setup — not a guess.
In R multiples: profit on winners relative to your risk unit.
Losses often exceed 1R after slippage on stops.
Commissions + slippage, both sides. This is the line most posts skip.
How often this exact setup actually fires.
Before costs: +0.020R. Costs take 50% of your raw edge.
At 5 trades/week: 148 years before your results are statistically distinguishable from a coin flip (95% confidence).
Half of the Kelly-optimal fraction (full Kelly: 1.0%). Professionals size below full Kelly because win rate and payoff are estimates, and estimation error above the Kelly peak is ruinous.
These formulas assume independent, identically distributed trades. Trades in the same instrument, session, or regime are correlated — your effective sample is smaller than your trade count, so real convergence takes longer than shown.
The part the viral posts skip:
In a casino, probabilities are known. In markets, your win rate and payoff ratio are estimates from history — noisy, regime-dependent, and decaying. That is why professional firms re-estimate constantly, size below full Kelly, and trade at frequencies where the math can actually converge. Judge your system on its expected value across hundreds of executions — never on the outcome of one trade.
The math needs frequency. Frequency needs automation.
At 5 manual trades a week, a small real edge can take decades to separate from noise. Systematic execution is how the sample size the math requires actually gets built — without emotion touching a single order.
Want the full breakdown of this math?
Get the free write-up: expected value, Kelly sizing, convergence — and the mistakes in the viral versions of this story.
Educational tool only. Nothing on this page is investment advice or a guarantee of results. Calculations are simplified statistical models; live trading involves risks these models do not capture. Trading involves substantial risk of loss. Full risk disclosure.