Trading expectancy calculator

Your numbers

The share of closed trades that made money, from your records.

The average profit of the winning trades, in dollars or in R.

The average loss of the losing trades as a positive number, in the same unit.

Results

Expectancy per trade
0.20
Over 100 trades
20.00
Payoff ratio (average win ÷ average loss)
2.00
Break-even win rate
33.3%
Profit factor
1.33

An educational tool: results leave out commissions, slippage and gaps. Nothing you enter is sent or saved. Not investment advice.

How to use it

  1. Take at least a few dozen closed trades of one strategy from your journal or a backtest; mixing strategies blurs the result.
  2. Enter the win rate, then the average win and the average loss, both as positive numbers in the same unit (dollars or R).
  3. Read the expectancy in that unit: a positive figure means the recorded trades averaged a gain, a negative one a loss. Compare your actual win rate with the break-even win rate.

The formula

Expectancy = win rate × average win − (1 − win rate) × average loss

Payoff ratio = average win ÷ average loss

Break-even win rate = average loss ÷ (average win + average loss)

Profit factor = (win rate × average win) ÷ ((1 − win rate) × average loss): the gross profit divided by the gross loss.

Worked example

Illustrative numbers: a strategy that won 40% of its trades, with an average win of 2R and an average loss of 1R, has an expectancy of 0.4 × 2 − 0.6 × 1 = +0.2R per trade. Over 100 trades that is +20R; at $250 risked per trade, $5,000 before costs.

Its payoff ratio is 2, its break-even win rate 33.3% and its profit factor 1.33. If the win rate falls to 30% with the same payoff, the expectancy turns to −0.1R. Expectancy describes results already recorded; it is not a forecast of the next 100 trades.

Questions

What is expectancy in trading?

Expectancy is the average amount a strategy has made or lost per trade, combining the win rate with the size of the average win and the average loss. It is usually expressed in dollars or in R, multiples of the initial risk.

Can a strategy with a low win rate have positive expectancy?

Yes, if its wins are large enough relative to its losses. With an average win twice the average loss the break-even win rate is about 33.3%, so a 40% win rate is positive in that case. The reverse also holds: a high win rate with small wins and large losses can be negative.

How many trades do I need for a reliable figure?

There is no exact number, but a few dozen trades is a minimum and more is better. In a small sample a short streak of wins or losses moves the result a lot, so treat early figures as provisional.

Does positive expectancy mean a strategy will be profitable from here?

No. It summarises results that have already happened. Costs, changing market conditions, a small sample and rules not followed can all make future results differ.

Related guides

Other calculators

From the calculation to the record

Save the entry, stop and target as a plan before the trade, then log the fills. The journal works out R, expectancy and drawdown from your own trades, and its AI score grades how closely each trade followed the plan. A free account is all it takes.