A high win rate does not make a strategy profitable, and a low one does not make it a loser. Expectancy combines how often you win with how much you win and lose, to show what each trade is worth on average.
Trading Expectancy Calculator
What your strategy makes per trade on average, from win rate and results.
Results are estimates for information only, not financial advice. Trading on leverage carries a high risk of losing money.
What Is Trading Expectancy?
Expectancy is the average amount you can expect to make or lose per trade, based on your past results. A strategy that wins 45% of the time with an average win of $150 and an average loss of $100 makes $12.50 per trade on average. Over 40 trades a month, that is about $500.
A strategy that wins 70% of the time but loses three times as much on its losing trades as it makes on its winners has a negative expectancy – it loses money in the long run, however good it feels most days.
How To Use The Calculator
- Choose your currency.
- Enter your win rate – the percentage of trades that made money.
- Enter your average win and average loss per trade, after costs. Enter the loss as a positive number.
- Enter how many trades you make per month to see the expected monthly result.
The calculator shows the expectancy per trade, the same figure in R (multiples of your average loss), the expected monthly result, the profit factor, the win/loss ratio and the break-even win rate for your averages.
The Formulas
Expectancy = win rate × average win − (1 − win rate) × average loss.
Profit factor = total profit from winners ÷ total loss from losers. Above 1 is profitable; many traders look for 1.5 or more.
Why It Matters To Traders
Expectancy is the clearest single test of whether a strategy is worth trading. It keeps you from judging a strategy on a few big wins or a painful losing streak, and it tells you what a typical month should look like.
It also shows which lever to pull. If expectancy is low, you can raise the win rate, raise the average win, or cut the average loss – and cutting losses early is often the easiest of the three.
Tips
- Use at least 30–50 trades from your journal, ideally from the same strategy and market.
- Include spreads and commissions in your averages, or the result will be too optimistic.
- Check how a positive expectancy holds up through losing streaks with the drawdown and risk of ruin calculator.
Related Trading Calculators
Alternatively, see our full suite of free online trading calculators.
DayTrading.com’s free trading calculators are for education and planning only and are not financial advice. Trading with leverage is high risk, and you could lose any money you invest. Trade responsibly.