What is expectancy in trading?

Expectancy is the average amount you expect to make or lose per trade: (win rate × average win) − (loss rate × average loss). It is the only number that determines whether a strategy makes money over many trades, which is why a win rate quoted without an average loss tells you almost nothing.

What is a good expectancy?

Any positive number is a working edge; the size tells you how hard it has to work. An expectancy of +0.2R means 100 trades return about 20R before costs. What matters more than the figure is that it stays positive after spreads, fees and slippage, which routinely turn a marginal edge negative.

What win rate do I need to break even?

It depends entirely on your reward-to-risk. At 1:1 you need above 50%. At 2:1 you need above 33.3%. At 3:1, above 25%. The formula is 1 ÷ (reward:risk + 1). This is why a 40% win rate at 2:1 is genuinely good and a 60% win rate at 1:2 loses money.

What is the difference between expectancy and profit factor?

Expectancy is per trade and tells you what to expect from the next one. Profit factor is gross profit divided by gross loss across a whole set of trades — a ratio above 1 is profitable. Expectancy is the more useful planning number; profit factor is the more common reporting number.

Expectancy calculator

A win rate on its own tells you nothing. Enter your win rate alongside your average win and average loss to see whether the strategy actually has an edge — and what win rate it would need to break even.

Win rate

Average win

In R multiples or %.

Average loss

As a positive number.

Expectancy

+0.35

per trade

Reward:risk

2.0 : 1

Break-even win rate

33.3%

at this reward:risk

Profit factor

1.64

Positive expectancy: every trade is worth an average of +0.35R. Over 100 trades that is roughly 35R before costs. You could drop to a 33.3% win rate before this stops working.

This is the calculation that exposes most signal marketing. A service advertising a 90% win rate without publishing its average loss has told you nothing — at 1:4 reward-to-risk, 90% is barely break-even, and a single bad run erases a year.

We publish our own win rate, average winner and average loser on the track record so you can run them through this yourself. The reasoning is in why a 40% win rate can beat a 90% one.

Frequently asked questions

What is expectancy in trading?: Expectancy is the average amount you expect to make or lose per trade: (win rate × average win) − (loss rate × average loss). It is the only number that determines whether a strategy makes money over many trades, which is why a win rate quoted without an average loss tells you almost nothing.
What is a good expectancy?: Any positive number is a working edge; the size tells you how hard it has to work. An expectancy of +0.2R means 100 trades return about 20R before costs. What matters more than the figure is that it stays positive after spreads, fees and slippage, which routinely turn a marginal edge negative.
What win rate do I need to break even?: It depends entirely on your reward-to-risk. At 1:1 you need above 50%. At 2:1 you need above 33.3%. At 3:1, above 25%. The formula is 1 ÷ (reward:risk + 1). This is why a 40% win rate at 2:1 is genuinely good and a 60% win rate at 1:2 loses money.
What is the difference between expectancy and profit factor?: Expectancy is per trade and tells you what to expect from the next one. Profit factor is gross profit divided by gross loss across a whole set of trades — a ratio above 1 is profitable. Expectancy is the more useful planning number; profit factor is the more common reporting number.

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These calculators are educational and are not financial advice. They describe arithmetic, not outcomes — no position size makes a losing strategy profitable. Trading carries risk, including loss of capital.