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Trading Expectancy Calculator

Find out what a trading strategy makes or loses per trade on average, from its win rate and average win and loss, with the profit factor, win/loss ratio and the win rate it needs to break even.

Results entered as
%
USD
USD

Optional, to project the total.

More options: costs
USD

Spread, commission and swap, if your averages are before costs.

Expectancy per trade

+$12.50

+0.125 R per trade, where 1 R = the average loss

Profit factor

1.23

Gross profit ÷ gross loss

Win/loss ratio

1.50

Average win ÷ average loss

Break-even win rate

40%

Yours: 45%

Expected total

+$1,250.00

+12.50 R over 100 trades

Expectancy is an average over many trades: a few dozen can lose even with a real edge, so measure it over 50–100 trades or more. To size positions from it, use the Kelly criterion calculator; for the chance of a long losing run, the risk of ruin calculator.

Show the math
  1. Expectancy = win rate × average win − loss rate × average loss0.45 × $150.00 − 0.55 × $100.00 = +$12.50
  2. In R = expectancy ÷ average loss$12.50 ÷ $100.00 = +0.125 R
  3. Profit factor = (win rate × average win) ÷ (loss rate × average loss)$67.50 ÷ $55.00 = 1.227
  4. Win/loss ratio = average win ÷ average loss$150.00 ÷ $100.00 = 1.500
  5. Break-even win rate = average loss ÷ (average win + average loss)$100.00 ÷ ($150.00 + $100.00) = 40%
  6. Expected total = expectancy × number of trades+$12.50 × 100 = +$1,250.00
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Quick answer

Expectancy = win rate × average win − loss rate × average loss. A strategy that wins 45% of trades with a $150 average win and a $100 average loss makes 0.45 × 150 − 0.55 × 100 = $12.50 per trade (+0.125 R), has a profit factor of 1.23 and breaks even at a 40% win rate.

What is the Trading Expectancy Calculator?

Expectancy is the average amount a strategy makes or loses per trade over many trades. It combines the two numbers traders usually look at separately — how often they win and how big the wins are compared with the losses — into one figure. A positive expectancy is an edge; a negative one loses money at any position size.

Expectancy = Win rate × Average win − Loss rate × Average loss
Profit factor = (Win rate × Average win) ÷ (Loss rate × Average loss)
Win/loss ratio = Average win ÷ Average loss
Break-even win rate = Average loss ÷ (Average win + Average loss)

A strategy that wins 45% of the time, with an average win of $150 and an average loss of $100, makes 0.45 × $150 − 0.55 × $100 = $12.50 per trade. Over 100 trades that is $1,250 on average. Its win/loss ratio is 1.5, so it needs to win only 100 ÷ 250 = 40% of trades to break even — it is profitable while losing more trades than it wins.

Expectancy in R divides the result by the average loss (1 R = what you lose on a typical losing trade): $12.50 ÷ $100 = +0.125 R. R makes strategies comparable across account sizes, and it is the unit used by the Kelly criterion calculator and the risk/reward calculator.

The profit factor is the gross profit divided by the gross loss over the same trades: $67.50 ÷ $55 = 1.23 for this example. Above 1 the strategy makes money, below 1 it loses. Both measures come from your past trades, so they are only as reliable as the sample behind them.

How to use this calculator

  1. Results entered as — Money for averages in your account currency, R multiple for averages in units of risk (a 2.5 R win and a 1 R loss).
  2. Win rate from — type the win rate as a percentage, or enter the number of winning and losing trades from your journal or broker statement and let the calculator work out the rate.
  3. Average win and average loss — the mean of your winning and of your losing trades. Type the loss as a positive number; a minus sign is ignored.
  4. Number of trades — to project the average result over that many trades.
  5. More options — a cost per trade if your averages are before spread, commission and swap; in R mode, the risk per trade in money to see the results in your currency.

The result shows the expectancy per trade in money and in R, the profit factor, the win/loss ratio, the win rate needed to break even and the expected total over your number of trades. Show the math lists each formula with your numbers.

Worked example

From a trade journal. 27 winning and 33 losing trades: a 45% win rate. Average win $150, average loss $100.

0.45 × $150 − 0.55 × $100 = $67.50 − $55 = +$12.50 per trade (+0.125 R)

Profit factor $67.50 ÷ $55 = 1.23, win/loss ratio 1.50, break-even win rate 40%. Over 100 trades: +$1,250.

With costs. If those averages are before a $5 cost per trade, each win nets $145 and each loss costs $105. Expectancy falls by exactly the cost to +$7.50, the profit factor to 1.13 and the break-even win rate rises to 105 ÷ 250 = 42%.

In R. A trend system wins 35% of trades at 2.5 R and loses 1 R otherwise: 0.35 × 2.5 − 0.65 × 1 = +0.225 R per trade, a profit factor of 1.35 and a break-even win rate of 28.6%. Risking $100 per trade, that is $22.50 per trade and $4,500 over 200 trades.

A high win rate that loses. 70% winners averaging $50 and 30% losers averaging $150: 0.7 × $50 − 0.3 × $150 = −$10 per trade. At a 1 : 3 win/loss ratio the strategy needs a 75% win rate just to break even.

When to use it

  • Reviewing a trading journal — turn a month or a year of results into one number per trade.
  • Testing a strategy idea — check what win rate a target and stop combination needs before trading it.
  • Comparing strategies — expectancy in R puts systems with different stops and account sizes on the same scale.
  • Checking the effect of costs — see how much of a small edge the spread and commission take.
  • Before sizing positions — a positive expectancy is the starting point for Kelly sizing and risk-of-ruin estimates.

Common mistakes

  • Judging a strategy by its win rate alone. A 70% win rate loses money if the average loss is three times the average win.
  • Using too few trades. Twenty trades can show a 60% win rate by chance; a stable estimate needs 50–100 trades or more.
  • Leaving out costs. On a short-term strategy, spread and commission can be the difference between a positive and a negative expectancy.
  • Mixing planned and actual results. Use the averages your trades actually achieved, after slippage and early exits, not the targets and stops you set.
  • Mixing position sizes. If the size changed a lot over the sample, money averages are distorted; measure in R instead.

Frequently asked questions

How do you calculate trading expectancy?

Multiply the win rate by the average win, multiply the loss rate by the average loss and subtract the second from the first. A strategy that wins 45% of trades with a $150 average win and a $100 average loss has an expectancy of 0.45 × 150 − 0.55 × 100 = $12.50 per trade.

What is a good win/loss ratio?

It depends on the win rate. The win/loss ratio (average win ÷ average loss) and the win rate together decide profitability: at a ratio of 1.5 you break even at a 40% win rate, at 2 you need 33.3%, and at 0.5 you need 66.7%. A ratio below 1 can work, but only with a high and stable win rate.

What is a good profit factor?

Above 1 a strategy makes money and below 1 it loses. Many traders treat 1.5 or more over a large sample as solid and above 2 as strong; a profit factor of 1.1 or less is easily wiped out by costs or a change in market conditions.

What is the difference between win rate and win/loss ratio?

Win rate is the share of trades that make money, for example 45%. The win/loss ratio, also called the payoff ratio, compares the size of the average win with the average loss, for example $150 ÷ $100 = 1.5. Some people also call wins divided by losses (27 ÷ 33) a win/loss ratio; this calculator uses the payoff meaning and shows the win rate separately.

What win rate do I need to be profitable?

Break-even win rate = average loss ÷ (average win + average loss). With a $150 average win and a $100 average loss it is 100 ÷ 250 = 40%. Costs per trade raise it: with $5 per trade it becomes 105 ÷ 250 = 42%.

What does expectancy in R mean?

R is the amount you lose on a typical losing trade. Expectancy in R is the average result per trade divided by that amount, so +0.125 R means you make an eighth of your usual risk per trade on average. It lets you compare strategies with different stop sizes and account balances.

Can a strategy with a positive expectancy still lose money?

Yes, over a short run. Expectancy is an average over many trades; a run of losses is normal even with an edge. Risking too much per trade can also end the account before the edge plays out, which is what the risk of ruin calculator measures.

Related calculators

  • Risk-Reward Ratio Calculator

    Get the risk-reward ratio of a trade and the win rate you need to break even at that ratio.

  • Kelly Criterion Calculator

    Calculate the Kelly fraction from your win rate and average win/loss ratio, with half and quarter Kelly alongside.

  • Risk of Ruin Calculator

    Estimate the probability that a strategy reaches a chosen drawdown, from its win rate, reward-to-risk ratio and risk per trade.

  • Sharpe Ratio Calculator

    Measure return per unit of risk: the Sharpe ratio from an average return and standard deviation or from a list of period returns, annualised, with the Sortino ratio for downside risk.

  • Break-Even Price Calculator

    Find the price a trade has to reach to cover its spread and commission.

  • Drawdown Calculator

    Find the gain needed to recover from a drawdown. A 50% loss needs a 100% gain to get back to even.

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