Expectancy is the average amount a strategy is expected to make or lose per trade — the single number that combines your win rate, your average win and your average loss. Positive expectancy means the rule has an edge; negative means it loses over time no matter how good any single week feels.
Enter your three numbers below. Use dollars or R for the win/loss fields — the result comes back in the same units, plus a per-1R reading that makes strategies comparable across account sizes.
The formula
Expectancy = (win rate × average win) − (loss rate × average loss). A strategy that wins 40% of the time with a $300 average win and a $150 average loss has an expectancy of (0.40 × $300) − (0.60 × $150) = $120 − $90 = +$30 per trade.
The implied profit factor is the companion number: gross wins divided by gross losses, here (0.40 × 300) ÷ (0.60 × 150) = 1.33. Expectancy tells you the edge per trade; profit factor tells you how much cushion that edge has.
What expectancy does not tell you
Two things. First, variance: a +0.2R expectancy with a 25% win rate produces brutal losing streaks on the way to its average — pair this calculator with the risk-of-ruin calculator to see whether your sizing survives the path. Second, sample size: expectancy computed from 20 trades is mostly noise. Our own 12-month research runs publish per-trade expectancy from hundreds or thousands of trades for exactly that reason.
Frequently asked questions
What is a good expectancy in trading?
Anything reliably positive after costs is workable — what matters is expectancy per 1R risked multiplied by how often the setup occurs. A +0.2R edge traded 200 times a year compounds far better than a +0.5R edge that fires monthly. Judge it together with trade frequency and drawdown, not in isolation.
How is expectancy different from win rate?
Win rate ignores the size of wins and losses, so on its own it says almost nothing. A 30%-win-rate strategy with 3R winners has positive expectancy (0.3×3 − 0.7×1 = +0.2R); a 70%-win-rate strategy with 0.3R winners is a loser (0.7×0.3 − 0.3×1 = −0.09R). Expectancy is the number that settles it.
How many trades do I need before I can trust my expectancy?
As a rough ladder: 30 trades screens an idea, 100 makes the direction believable, 300+ starts to justify trusting the sizing. The standard error of a win-rate estimate at 50% is about ±10 percentage points at 25 trades and ±5 at 100 — our guide on sample size walks through the math.