Trading Expectancy Calculator

How Trading Expectancy Works

Trading expectancy tells you the average dollar amount you can expect to win or lose per trade over a large sample. A positive expectancy system is profitable over time; a negative one will eventually bankrupt you regardless of short-term luck.

Expectancy formula:

Expectancy = (Win Rate × Average Win) − (Loss Rate × Average Loss)

Where:

• Win Rate = percentage of trades that are profitable
• Loss Rate = 1 − Win Rate
• Average Win = average profit per winning trade (in dollars or %)
• Average Loss = average loss per losing trade (in dollars or %)

Worked example:

• Win rate: 45%
• Loss rate: 55%
• Average win: $320
• Average loss: $180

Expectancy = (0.45 × $320) − (0.55 × $180) Expectancy = $144 − $99 = $45 per trade

This system earns $45 on average per trade placed, despite losing more often than it wins. The key is the reward-to-risk ratio of 320÷180 = 1.78:1.

Minimum viable win rate by reward:risk ratio:

Breakeven Win Rate = 1 ÷ (1 + R:R ratio)

At 2:1 reward-to-risk: Breakeven win rate = 1 ÷ 3 = 33.3%

You only need to win 1 in 3 trades to break even, and anything above that is profit.

Expectancy per dollar risked (E-ratio):

E-ratio = Expectancy ÷ Average Loss = $45 ÷ $180 = 0.25

An E-ratio above 0.20 is considered a solid system by most professional traders.

Expectancy before costs is not expectancy. The number this page returns is gross, because it only knows your average win and average loss. If those came from a broker statement they already include commission and slippage and you are fine. If they came from a backtest or from reading levels off a chart, they do not, and the real figure is lower by whatever a round trip costs you. On a system averaging $45 a trade, a $12 round trip is a quarter of the edge. On a scalping system averaging $8, the same $12 turns a winner into a loser. This is the single most common way a system that looks fine on paper bleeds money live.

Track your live expectancy across at least 50-100 trades before judging a system. Small samples are dominated by variance: a 45% win rate can easily produce eight losers in a row, and that run says nothing at all about whether the edge is real.