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Expectancy Calculator
Measure the expected value of a forex or CFD strategy from win rate, average win and average loss.
Trading expectancy is E = pW - (1 - p)L, where p is win rate, W is average win and L is average loss. The same inputs also give reward/risk ratio, expectancy in R, profit factor and the break-even win rate.
Trade sample
Expectancy
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Educational tools for non-US traders · not directed at US persons.
How it works
What expectancy measures
Expectancy is the average result per trade implied by three inputs: win rate, average win and average loss. The output uses the same unit as the win and loss inputs, so it can be dollars, pips or R units as long as both averages use the same unit.
Formulas used
E = p × W - (1 - p) × L
RR = W ÷ L
ER = p × RR - (1 - p)
break-even win rate = 1 ÷ (1 + RR)
profit factor = (p × W) ÷ ((1 - p) × L)
Worked example
With a 40% win rate, average win of 2 and average loss of 1, expectancy is 0.40 × 2 - 0.60 × 1 = 0.20. The reward/risk ratio is 2, the break-even win rate is 33.3333%, and profit factor is 1.3333.
How to read the result
A positive expectancy means the average trade is positive under the entered assumptions. It does not say whether the sample is large enough, whether spreads and slippage are included, or whether the same behavior will persist.