Expectancy per Trade
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Monthly Expected Profit
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Expectancy Ratio
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When Should You Use This?
Use this calculator to:
• Evaluate whether your trading strategy has a positive mathematical edge
• Estimate your monthly profit potential based on trade frequency
• Compare different trading systems or strategy variations objectively
How It Works
1
Input Your Trading Stats
Enter your win rate, average winning trade, average losing trade, and how many trades you take per month from your trading journal or backtest results.
2
Calculate Expectancy
The formula multiplies your win rate by average win and subtracts your loss rate times average loss. This gives the expected dollar amount you make (or lose) per trade.
3
Assess Your Edge
A positive expectancy means your system makes money over time. The ratio shows how much you earn per dollar risked. Multiply by your trade frequency for monthly projections.
Frequently Asked Questions
Expectancy is the average amount you expect to win or lose per trade over a large number of trades. It combines your win rate with your average win and loss sizes to give a single number that tells you if your system is profitable.
Any positive expectancy means your system is profitable over time. A good stock trading system typically has an expectancy of $0.20 to $1.00+ per dollar risked. Higher is better, but consistency and sample size matter more than the absolute number.
You need at least 30 trades minimum for a rough estimate, but 100+ trades gives much more reliable results. The more trades in your sample, the more confidence you can have that the expectancy reflects a real edge rather than random luck.
Yes. A system with a 30% win rate but large average wins can be far more profitable than a 70% win rate system with small wins and large losses. Expectancy captures the full picture by combining both win rate and the size of wins and losses.
You can improve expectancy three ways: increase your win rate with better entry criteria, increase your average win by letting winners run and using trailing stops, or decrease your average loss with tighter risk management and cutting losers faster.