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Expectancy

Expectancy = (win rateThe share of your trades that make money. On its own it says nothing about profit. × average win) − (loss rate × average loss). If it is positive, the rule made money on average in your sample. If it is negative, more trades just means losing faster.

Example with round numbers: win rate 40%, average win 2R, average loss 1RThe amount you lose if your stop is hit.. Expectancy = 0.4 × 2 − 0.6 × 1 = +0.2R per trade (before costs!).

A high Win rate alone tells you nothing. Always include costs and check the Sample size.

Related

• Win rate
• R-multiple
• Risk-reward ratio
• Sample size

Trading termsWin rateR-multiple

Last checked: 2026-11-04 · Educational, not financial advice.

Education only, not financial advice. No signals. Backtests are hypothetical: real trading can be worse. Past results don't predict future results.