Calculator
Trading Expectancy Calculator
Calculate the average expected result per trade in R. Expectancy helps you understand whether a strategy is favorable after combining win rate, average winner and average loser.
Expected result per trade:
How trading expectancy works
Expectancy combines the probability of winning with the size of the average win, then subtracts the probability of losing multiplied by the average loss.
The basic formula is: expectancy = win rate x average winner - loss rate x average loser. If the result is positive, the average trade is favorable before costs, slippage and execution mistakes. If you only have total profit and total loss, start with the average win average loss calculator.
Example expectancy calculation
If a strategy wins 50% of the time, makes 1.5R on winners and loses 1R on losers, the expectancy is 0.25R per trade.
That does not mean every trade earns 0.25R. It means that over a large enough sample, the average trade is expected to be positive if the assumptions are accurate.
How to read the expectancy result
The output is the average expected result per trade, measured in R. If the calculator shows 0.20R, the assumptions imply an average gain of 0.20 times the amount risked per trade before costs.
| Expectancy | Meaning | Practical note |
|---|---|---|
| Positive | The average trade is favorable before costs. | Still needs enough sample size and survivable drawdown. |
| 0R | The profile is break-even before costs. | Fees, slippage or mistakes can make it negative. |
| Negative | The average trade is unfavorable under the inputs. | Changing risk size alone does not fix a negative edge. |
Example expectancy scenarios
These examples show why win rate and reward/risk must be judged together. A lower win rate can still be favorable when winners are large enough, while a high win rate can be weak if losses are too large.
| Win rate | Average winner | Average loser | Expectancy |
|---|---|---|---|
| 40% | 2.0R | 1.0R | 0.20R |
| 45% | 1.5R | 1.0R | 0.13R |
| 50% | 1.5R | 1.0R | 0.25R |
| 55% | 1.0R | 1.0R | 0.10R |
| 60% | 0.8R | 1.0R | 0.08R |
| 70% | 0.5R | 1.5R | -0.10R |
Positive expectancy does not remove drawdown
Expectancy is an average. It says nothing about the order of wins and losses. A positive-expectancy strategy can still start with a losing streak or go through a long flat period.
Use the trading probability simulator after calculating expectancy to see how the same edge can feel across a random sequence of trades.
A useful workflow is to calculate expectancy here, then enter the same win rate and average reward/risk in the simulator. The calculator tells you the average edge; the simulator shows the possible path.
Use expectancy as an input, not a promise
The calculator only reflects the assumptions you enter. If the win rate comes from too few trades, the average winner is inflated by one outlier or the average loser excludes execution mistakes, the expectancy result will look cleaner than reality.
Treat the output as a model of the system profile. Then compare it with a larger sample, real costs and simulated drawdown before deciding how much risk the strategy can support.
Win rate alone is not enough
A 40% win rate can be profitable if the average winner is large enough. A 70% win rate can lose money if losses are much larger than wins. That is why expectancy is usually more useful than win rate by itself.
If you only know your wins and losses, start with the win rate calculator, then return here to combine that number with reward/risk. For a deeper comparison, read win rate vs risk reward.
Before trusting the number
Check whether the inputs describe the strategy you are actually trading. Planned reward/risk is useful before testing, but realized average winner and average loser are better once you have enough executed trades.
If the strategy changes market, timeframe, entry logic or exit behavior, recalculate expectancy for the new version instead of mixing incompatible trades into one average.
Frequently asked questions
What is good trading expectancy?
Positive expectancy is the starting point. A higher number is better, but it must be judged with drawdown, sample size, costs and whether the strategy can be executed consistently.
Can a strategy have positive expectancy and still lose money?
Yes, especially over a small sample. Variance, execution errors, fees and changing market conditions can all affect real results.
What is break-even expectancy?
Break-even expectancy is 0R per trade before costs. At that point, the average winner, average loser and win rate offset each other.
Is expectancy better than win rate?
Expectancy is more complete because it includes both win rate and the size of wins and losses. Win rate alone can be misleading.
Should expectancy be calculated in dollars or R?
R is often cleaner because it normalizes trades by risk. Dollars are useful when you want to understand account impact.
Does position size change expectancy?
Position size changes the dollar impact of the edge, but it does not turn a negative expectancy profile into a positive one.
Should I include fees and slippage?
Yes. Fees, spreads, commissions and slippage reduce real expectancy and can turn a small positive edge into a break-even or negative one.
Can expectancy be trusted from a small sample?
Only with caution. A small sample can make win rate, average winner and average loser look more stable than they really are.