WhitmanTrading

Expectancy Calculator

Expectancy is the average result of one trade, measured in R. It multiplies your win rate by your average win, subtracts the loss rate multiplied by your average loss, then subtracts costs. A positive figure means the strategy makes money over enough trades.

Expectancy per trade

Enter your own numbers from at least 30 recorded trades. Results are in R — multiples of what you risk per trade.

Expectancy per trade 0.180R
Expected over 100 trades 18.0R
Win rate needed to break even 34.0%
Edge before costs 0.200R

R means one unit of risk. If you risk $200 a trade, 1R is $200 and an expectancy of 0.18R is $36 per trade on average.

Runs entirely in your browser. Nothing you type is sent anywhere or stored.

What it computes

A candlestick chart of the site's shared price history.
The average result of one trade, measured in R. Illustrative chart - not real market data.

Expectancy is the average result of one trade, expressed in R — multiples of what you risk. It is the one figure that answers whether a strategy makes money, and it needs three inputs that most traders already have and rarely combine.

The formula is a weighted average. Multiply the win rate by the average win, subtract the loss rate multiplied by the average loss, then subtract the cost of transacting:

Expectancy = (win rate × average win) − (loss rate × average loss) − cost

Every term is in R, which is what makes it comparable. A trader risking $50 and one risking $5,000 can put their records side by side, because both are measured against their own risk rather than in currency.

Positive means the strategy makes money over enough trades. Negative means it does not. There is no third answer, and no amount of discipline converts a negative expectancy into a positive one.

Why win rate alone tells you nothing

Price bars with the entry and stop marked, defining one unit of risk.
One R is the distance from entry to stop. Illustrative chart - not real market data.

Two strategies with opposite win rates can have identical expectancy. A method winning 40% of the time at 2R returns 0.8R before costs. A method winning 70% of the time at 0.4R, losing 1R when wrong, returns 0.28R — less than half as much, despite being right nearly twice as often.

The first half of the price series weighted by outcome.
It is a weighted average, not a win percentage. Illustrative chart - not real market data.

Which is why “what is your win rate” is close to a meaningless question. It is one of three inputs, and the least informative of the three, because it is the only one bounded between 0 and 100. The average win has no ceiling.

The second half of the price series showing unbounded winners.
The average win has no ceiling. The win rate does. Illustrative chart - not real market data.

And it explains a common trap. Cutting winners early raises the win rate and lowers the average win, so it improves the statistic people quote while reducing the number that actually pays.

A worked example

Take the default figures above: a win rate of 40%, winners averaging 2R, losers averaging 1R, and costs of 0.02R per round trip.

The winning side contributes 0.40 × 2 = 0.80R. Four trades in ten win, each returning twice what was risked.

The losing side takes 0.60 × 1 = 0.60R. Six trades in ten lose roughly the full risk.

Costs take another 0.02R, paid on all ten trades regardless of outcome.

So expectancy is 0.80 − 0.60 − 0.02 = 0.18R per trade. Risking $200 a trade, that is an average of $36 per trade and $3,600 over 100 trades — before the variance that makes any short stretch look nothing like it.

The break-even win rate falls out of the same numbers. With a 2R average win and a 1R average loss, you need (1 + 0.02) ÷ (2 + 1) = 34.0% to break even. The strategy wins 40%, so it has six percentage points of margin — and if the win rate drifts to 33%, it stops working.

What the costs actually do

A candlestick chart annotated with the round-trip cost.
Costs come out of the edge: 2% of a bar per trip. Illustrative chart - not real market data.

Costs are subtracted from the edge, not from the winners. That is the part people get wrong. A round trip on this site’s shared price series is 2% of a median bar’s range and exceeds 10% on 15 of 576 bars, so on the quietest bars a single round trip consumes a tenth of everything available.

At the default figures costs take 10% of the gross edge. Small. Now hold the win rate and average loss constant and drop the average win to 0.3R: the gross edge falls to −0.48R and no cost figure rescues it. Conversely at a 0.1R edge, a 0.05R cost removes half of it.

A candlestick chart with a volume histogram beneath it.
Trading twice as often doubles the cost, not the edge. Illustrative chart - not real market data.

The rule that follows is about frequency, not about entries. Doubling your trade count doubles the cost while leaving expectancy per trade unchanged, so a marginal strategy traded often is a losing strategy and the same strategy traded selectively may not be.

The original data

Of the 24,971 unique videos in research/search-study-corpus.jsonl, zero have an instruction-shaped title mentioning expectancy. Win rate appears in 161 at a median of 13,711 views across 130 channels, and position sizing in 195 at a median of 1,738. The counts come from site/rank_tools2.py, which deduplicates by video id before counting anything.

A stretch of the price series cut short at a run of losses.
Six losses against a positive edge. Stop? Illustrative chart - not real market data.

Zero videos on the number that decides whether a strategy works, against 161 on one of its three inputs. That is the clearest gap measured anywhere on this site. Win rate is intuitive, quotable and bounded; expectancy requires three figures and a record to get them from, and the audience is being served the easy half.

A window of price bars containing a run of consecutive losses.
A positive edge still produces long losing runs. Illustrative chart - not real market data.

The variance is why a positive expectancy still feels like failure regularly. At a win rate of 40%, a run of six losses has a probability of about 4.7% on any given six trades — which means it happens roughly every 21 sequences and is entirely ordinary. The expectancy did not change during that run.

When it fails

A sideways, range-bound candlestick series.
And a rule tuned on a trend keeps firing in this. Illustrative chart - not real market data.

The largest failure is computing it from too few trades. Thirty trades gives you three numbers with enormous error bars, and the average win is the least stable of them because a single outsized winner moves it a long way. An expectancy calculated from a good month is a description of that month. On the shared price series, price closes higher 10 bars later 54% of the time — a slight bias that still produces long streaks in both directions, so a short record showing a strong edge is exactly what randomness produces.

A long-horizon candlestick view of an extended record.
Thirty trades is a description, not a verdict. Illustrative chart - not real market data.

The second failure is leaving costs out. The gross figure is not the one you receive, and at high frequency it is not close.

A third is a shifting average loss. Expectancy assumes losers cluster near 1R. If yours run to 1.8R because stops get widened, the arithmetic above is describing a strategy you are not trading.

A fourth is a survivorship-filtered record. Trades you did not log, or a demo period you have excluded, remove the worst results and inflate every input.

A fifth is treating it as a forecast. It is a description of the trades you have already taken, and it holds only while conditions and execution stay similar.

Price bars where a winning move is cut short at the decision point.
Cutting winners raises the win rate and lowers this. Illustrative chart - not real market data.

And a sixth is optimising the win rate because it moved most easily. Cutting winners raises it and lowers expectancy, which is the specific mistake this whole page exists to make visible.

Win rate is the input everybody quotes and the one that matters least on its own. Risk per trade is what defines 1R, and therefore the units every figure here is measured in. And risk management is where expectancy sits inside the wider set of decisions that keep an account alive.

What I actually do

This is the number I wish someone had put in front of me first. I spent a long time trying to raise my win rate, which is the most intuitive thing to optimise and very nearly the least useful. Raising the average win does more, and it is the half nobody talks about because a high win rate feels like being right and a high average win feels like getting lucky.

— Michael Whitman

This page is educational, not financial advice. Test every idea on your own charts before risking money.