Risk and position sizing
Trading Expectancy Calculator
Find out what an average trade is worth: enter your win rate, average win, average loss and costs to get the expectancy in dollars and in R, the breakeven win rate, and how much a small sample can tell you.
Trading expectancy calculator
- Expectancy per trade
- +$20.00
- Expectancy in R
- +0.20R
- Breakeven win rate
- 33.3%
- Payoff ratio
- 2
- Over 100 trades
- +$2,000.00
Likely range per trade (±2 standard errors)
With 100 trades, the true expectancy could plausibly be anywhere from −$9.39 to +$49.39 per trade. That range includes zero: this sample cannot yet tell a real edge from luck.
A result like this needs about 216 trades before it sits two standard errors above zero.
1R is your average loss. Costs come off every trade, winners and losers alike.
The calculator runs in your browser. Nothing you type is saved or sent anywhere.
Educational tool, not financial advice. The results only reflect the numbers you enter and say nothing about future returns. Trading involves a substantial risk of loss.
How to use the expectancy calculator
- Enter your win rate and your average winning and losing trade in dollars, from your journal or a backtest.
- Add your average costs per trade: commissions, fees and slippage. They come off every trade, win or lose.
- Read the expectancy per trade in dollars and in R, where 1R is your average loss, and the breakeven win rate for that payoff.
- Enter how many trades the numbers come from to see a rough range for the true expectancy. If the range includes zero, the sample cannot yet separate an edge from luck.
The expectancy formula in plain words
Expectancy is the average result of one trade: what the winners bring in, weighted by how often they happen, minus what the losers cost, weighted the same way, minus costs. Divide it by your average loss to express it in R, which lets you compare setups traded at different sizes.
The breakeven win rate is the hit rate at which the expectancy is exactly zero for your payoff. The range uses the standard error: the spread of single trades divided by the square root of the number of trades. Two standard errors either side is a common rough band, and it assumes the market behaves as it did in your sample.
Expectancy = W × average win − (1 − W) × average loss − costs
Expectancy in R = expectancy ÷ average loss
Breakeven win rate = (average loss + costs) ÷ (average win + average loss)
Range ≈ expectancy ± 2 × σ ÷ √N, with σ = (average win + average loss) × √(W × (1 − W))
Worked example
Hypothetical: 100 trades with a hit rate of 40%, an average win of $200 and an average loss of $100, before costs.
- Expectancy: 0.40 × $200 − 0.60 × $100 = $80 − $60 = +$20 per trade.
- In R: $20 ÷ $100 = +0.2R per trade.
- Breakeven win rate: $100 ÷ ($200 + $100) = 33.3%.
- Spread of one trade: σ = $300 × √(0.40 × 0.60) ≈ $147. Over 100 trades the standard error is about $14.70, so the range runs from about −$9 to +$49 per trade.
- The range crosses zero, so 100 trades are not enough to tell. About 216 trades with the same averages would put +$20 two standard errors above zero.
- With $5 of costs per trade, the expectancy drops to +$15 (+0.15R) and the breakeven win rate rises to 35%.
Questions
What is a good trading expectancy?
Any expectancy reliably above zero after costs is an edge, but how sure you are of it matters more than its size. +0.1R measured over 500 trades says more than +0.5R over 30. Compare setups in R, and check the range before trusting the number.
Can a low win rate still have a positive expectancy?
Yes, if the winners are big enough. With an average win of 3R and an average loss of 1R, a hit rate above 25% breaks even before costs. The reverse also holds: a high hit rate with large losses can lose money. The risk-reward ratio lesson shows the trade-off.
Why does the range matter?
Because a short run of trades is mostly noise. A strategy with no edge at all, winning half its trades at 1:1, shows +0.2R or better over 50 trades about one time in ten. If the range includes zero, keep collecting trades, ideally ones the strategy was not tuned on; see backtest overfitting.
Should I include costs?
Yes. Commissions, fees, spreads and slippage come off every trade, and on short-term strategies they often decide whether the expectancy is positive at all. Enter them per trade, for the round trip.
UpTickFlow is our product. These guides are education, not financial advice. Trading involves a substantial risk of loss.