Trading Expectancy Calculator
Work out the average profit per trade from your win rate and average win and loss, and the win rate you need to break even.
Expectancy per trade
+$58.50
Per month +$2,340.00
Expectancy per trade
+$58.50
Per month +$2,340.00
- Expected over 40 trades
- +$2,340.00
- Per dollar lost on a losing trade
- +0.32R
- Break-even win rate at this payoff
- 34.0%
- Payoff ratio
- 1.94 : 1
How to calculate trading expectancy
Expectancy is the average you make or lose per trade over many trades. It combines win rate and payoff, which is why a high win rate alone tells you little: winning 70% of the time with $100 wins and $300 losses loses $20 a trade.
The break-even win rate shows how much room you have. If your actual win rate sits only slightly above it, a small change in fills or fees could erase the edge.
Expectancy = (win rate × average win) − (loss rate × average loss). Break-even win rate = average loss ÷ (average win + average loss).
Worked example
Over 100 trades you had 45 winners averaging $350 and 55 losers averaging $180. Expectancy is 0.45 × $350 − 0.55 × $180, which is $157.50 − $99.00, or $58.50 a trade.
At 40 trades a month that projects to $2,340. The break-even win rate at this payoff is 34%, so you have about 11 percentage points of cushion.
What the result does not account for
- Sampling error. With few trades, luck can make a losing method look profitable, and the reverse.
- Changing conditions. A past average does not promise the next month's result.
- Commissions and slippage, unless your average win and loss are already net of them.
- Risk along the way, since two methods with equal expectancy can have very different drawdowns.
Frequently asked questions
Can expectancy change over time?
Yes. It is measured from past trades, and markets and your own execution change, so recalculate it from recent trades. A figure that keeps falling is a reason to look at the strategy.
Is win rate or risk/reward ratio more important?
Neither alone tells you whether a method makes money. A 70% win rate with $100 wins and $300 losses loses $20 a trade, while a 35% win rate with $500 wins and $100 losses makes $110 a trade.
Related calculators
- Risk/Reward Ratio CalculatorEnter an entry, a stop and a target to see the dollar risk, the dollar reward and the win rate the trade needs to break even after fees.
- Day Trading SimulatorRun 1,000 randomized trade sequences from your win rate and trade size, and read the median, the unlucky tenth and the chance of ending down.
- Kelly Criterion CalculatorFind the growth-maximizing share of your account to risk from your win rate and payoff ratio, along with half and quarter Kelly.
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