Discover the true edge of your trading strategy — expected value per trade, profit factor, and monthly expectancy.
Expectancy is the number that tells you whether your trading strategy actually makes money. It blends three statistics most traders track separately — win rate, average win, and average loss — into a single figure: the average dollar result you can expect from each trade over a large sample. If that number is positive, you have a genuine edge and time is on your side. If it is negative, no amount of discipline, position sizing, or motivation will save the strategy, because the math itself is working against you.
This is the antidote to one of trading's most expensive illusions: the belief that a high win rate equals profitability. A trader who wins 80% of trades but lets the losing 20% run far larger than the winners can easily have negative expectancy. Conversely, a trader who wins only 40% of the time but keeps losses small relative to wins can be highly profitable. Expectancy cuts through the emotional appeal of "being right" and measures what truly matters — being profitable.
Alongside expectancy, this calculator reports your profit factor (gross profit divided by gross loss) and your implied reward-to-risk ratio, then converts the per-trade edge into a monthly figure if you supply your typical trade count. Together these give you a clear, honest verdict on a strategy: keep it, refine it, or abandon it before it costs you more.
Expectancy is the average amount you can expect to win or lose per trade over many trades. A positive expectancy means you have a genuine edge in the market.
Formula: Expectancy = (Win Rate × Avg Win) − (Loss Rate × Avg Loss)
Profit Factor: (Win Rate × Avg Win) ÷ (Loss Rate × Avg Loss). Anything above 1.5 is considered a solid edge. Above 2.0 is excellent.
Yes. A 40% win rate with a 3:1 average R:R has an expectancy of +$60 per trade (assuming $100 avg win, $33 avg loss). Profit factor = 2.0. This is a strong edge.
1.0 = break even. 1.2–1.5 = marginal. 1.5–2.0 = good strategy. 2.0+ = excellent. Most professional systematic strategies run 1.5–2.5.
At minimum 100 trades, ideally 200–300. A small sample can show good stats by luck. Your profit factor and expectancy become reliable only with sufficient trade history.
Use your own trade history, not estimates. Win rate is the share of trades closed for a profit; average win is the mean dollar gain on your winners; average loss is the mean dollar loss on your losers (enter it as a positive number). Most broker statements or a simple trade journal give you all three. Garbage in, garbage out — honest inputs produce an honest verdict.
A small positive expectancy can still compound into real money across many trades, but it leaves little margin for slippage, fees, and the inevitable bad streak. Aim to widen the edge — by being more selective, cutting losers faster, or letting winners run — rather than simply trading more often. A bigger edge per trade is far more durable than a higher trade count.
Expectancy is most powerful as a feedback loop. Calculate it from your real results every month, then test one change at a time — a tighter stop, a higher reward target, skipping a losing setup — and re-measure to see whether the edge grew or shrank. This turns trading from a series of gut decisions into a measurable process you can actually improve.
It also connects directly to the rest of your risk management. A positive expectancy tells you the strategy is worth trading; the Position Size Calculator tells you how much to commit per trade; the Risk/Reward Calculator helps you raise the average-win-to-average-loss ratio that drives expectancy higher; and the Compound Growth Calculator shows where a steady positive edge leads over time. Edge first, size second, patience third.