Trade Expectancy Calculator

Trade Statistics
45
%
400
$
200
$
200
Expectancy / Trade
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Payoff Ratio--
Annual Expectancy--
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Why Expectancy Beats Win Rate

Expectancy is the probability-weighted average of your outcomes: wins multiplied by their average size, minus losses multiplied by theirs. It is the single number that tells you whether a system makes money at all.

Win rate alone is misleading. A 40% win rate with a 3:1 payoff is profitable; the same win rate at 1:1 is not. Traders who optimise for hit rate usually end up cutting winners short and letting losers run, which quietly destroys expectancy while the win rate looks healthy.

Expectancy is not a forecast. It is measured on a sample, and costs, slippage and regime shifts push the live figure below the backtested one. Re-run it regularly and compare against your risk of ruin.

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PC
Patricia Chen CFP
Financial Planning · Last reviewed: September 2026

Data Sources & Citations

Financial Disclaimer: This article is for educational and informational purposes only and does not constitute financial advice. Past performance is not indicative of future results. Consult a qualified financial advisor before making investment decisions.

How it is calculated

ExpectancyE = (W × avg_win) − (L × avg_loss)
Payoffb = avg_win / |avg_loss|
E per tradeE = (p × b − q) × avg_loss
RELATED WORKFLOW

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WHAT THIS RESULT MEANS

Reading the number

Enter values to see a practical interpretation.

MODELTransparent estimate

The tool uses only the inputs you set, with the formula published below.

LIMITATIONSReal-world results vary

Fees, taxes, provider rules and market movement can shift the outcome.

Reference example: p = 0.45, b = 2.2 → E = 0.54 × avg_loss per trade.

Reviewed August 21, 2026.

Important: Backtested expectancy rarely survives costs, delay and regime change.
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