Read a Histogram of R Results
Posted: Wed Oct 28, 2026 6:39 pm
Read a Histogram of R Results
A trader groups 40 trades into buckets. Worse than minus 1R: 3 trades. Between minus 1R and minus 0.5R: 17 trades. Between minus 0.5R and plus 0.5R: 5 trades. Between plus 0.5R and plus 1.5R: 6 trades. Between plus 1.5R and plus 2.5R: 5 trades. Above plus 2.5R: 4 trades.
Percentages: 7.5, 42.5, 12.5, 15, 12.5, and 10 percent.
Read the shape. A large cluster near minus 1R, which is the planned stop loss, as expected for a strategy that stops out often. A thinner spread of winners, with a right tail of four trades above 2.5R.
Now look at the left tail. Three trades lost more than 1R, 7.5 percent of the total. Those are violations of the stop rule, or slippage events. If each lost 1.8R, the excess is 0.8R times 3, which is 2.4R beyond the plan.
The middle bucket, with 5 trades near breakeven, may represent early exits or breakeven stops.
What can you conclude? The strategy has a healthy right tail and mostly disciplined stops, with a small problem on the left. Fixing the three outliers is worth about 2.4R over 40 trades, 0.06R per trade.
Check where those three trades occurred. News? Weekend? A moved stop?
Histograms show what averages hide, in particular whether results depend on a few trades.
Try this: build a histogram for your last fifty trades and identify the leftmost outlier.
A trader groups 40 trades into buckets. Worse than minus 1R: 3 trades. Between minus 1R and minus 0.5R: 17 trades. Between minus 0.5R and plus 0.5R: 5 trades. Between plus 0.5R and plus 1.5R: 6 trades. Between plus 1.5R and plus 2.5R: 5 trades. Above plus 2.5R: 4 trades.
Percentages: 7.5, 42.5, 12.5, 15, 12.5, and 10 percent.
Read the shape. A large cluster near minus 1R, which is the planned stop loss, as expected for a strategy that stops out often. A thinner spread of winners, with a right tail of four trades above 2.5R.
Now look at the left tail. Three trades lost more than 1R, 7.5 percent of the total. Those are violations of the stop rule, or slippage events. If each lost 1.8R, the excess is 0.8R times 3, which is 2.4R beyond the plan.
The middle bucket, with 5 trades near breakeven, may represent early exits or breakeven stops.
What can you conclude? The strategy has a healthy right tail and mostly disciplined stops, with a small problem on the left. Fixing the three outliers is worth about 2.4R over 40 trades, 0.06R per trade.
Check where those three trades occurred. News? Weekend? A moved stop?
Histograms show what averages hide, in particular whether results depend on a few trades.
Try this: build a histogram for your last fifty trades and identify the leftmost outlier.