Question 1

What is trade expectancy?

Accepted Answer

Trade expectancy is the average amount you can expect to make (or lose) per trade over a large sample. Formula: Expectancy = (Win Rate × Avg Win) − (Loss Rate × Avg Loss). A positive expectancy strategy is mathematically profitable over time; negative expectancy loses money regardless of win rate.

Question 2

Can a strategy with a 30% win rate be profitable?

Accepted Answer

Yes — if average wins are large enough relative to average losses. A 30% win rate with a 1:3 risk-reward ratio has expectancy = (0.30 × 3) − (0.70 × 1) = 0.90 − 0.70 = +$0.20 per dollar risked. Profitable despite losing 70% of trades.

Question 3

How many trades do I need to calculate reliable expectancy?

Accepted Answer

A minimum of 30–50 trades is needed for any statistical reliability. Professional traders use 100–200+ trades. A small sample can show positive expectancy by luck alone — the more trades in your sample, the more reliable the calculation.

Question 4

What inputs does this calculator need?

Accepted Answer

You need: your win rate (% of trades that are profitable), average winning trade size, and average losing trade size. These must come from your actual trade history — estimated or hypothetical inputs produce unreliable expectancy figures.

Trade Expectancy Calculator