Trade expectancy calculator
Turn a measured win rate and average win/loss into expectancy per trade, the win rate your own payoff ratio demands, and what that edge compounds to once it stops being multiplied by trade count.
Worked example — Expectancy per trade at the default 40% win rate, 2:1 payoff: +$60.00. +0.200 R, at 40% win rate, $600 average win, $300 average loss over 100 trades
Trend-following, 2:1 payoff: The page's own default and worked-example scenario.
Advanced options 3
Expectancy assumes the win rate and average sizes are stable and that trades are independent. Real records break both assumptions: losing runs cluster, and a short sample of trades tells very little about the true win rate.
This edge grows the typical account to $30,204 over 100 trades. The average across every path is $30,529, not what you will experience: a few extreme paths pull that number well above the account most people end up holding.
| Payoff ratio | Break-even win rate | Your 40% win rate | Expectancy per trade |
|---|---|---|---|
| 0.50 : 1 | 66.7% | short by 26.7 pts | -$120.00 |
| 1.00 : 1 | 50.0% | short by 10.0 pts | -$60.00 |
| 1.50 : 1 | 40.0% | exactly break-even | +$0.00 |
| 2.00 : 1 | 33.3% | clears it by 6.7 pts | +$60.00 |
| 3.00 : 1 | 25.0% | clears it by 15.0 pts | +$180.00 |
| 5.00 : 1 | 16.7% | clears it by 23.3 pts | +$420.00 |
Each row holds the average loss at $300 and the win rate at 40%, then asks what the average win would have to be. Break-even win rate is 1 / (1 + payoff ratio); it does not depend on position size, which is why it is the first thing worth checking about any strategy description.
The win rate each payoff ratio demands
| Payoff ratio | Break-even win rate | Your 40% win rate | Expectancy per trade |
|---|---|---|---|
| 0.50 : 1 | 66.7% | short by 26.7 pts | -$120.00 |
| 1.00 : 1 | 50.0% | short by 10.0 pts | -$60.00 |
| 1.50 : 1 | 40.0% | exactly break-even | +$0.00 |
| 2.00 : 1 | 33.3% | clears it by 6.7 pts | +$60.00 |
| 3.00 : 1 | 25.0% | clears it by 15.0 pts | +$180.00 |
| 5.00 : 1 | 16.7% | clears it by 23.3 pts | +$420.00 |
Break-even win rate is one over one plus the payoff ratio. It does not depend on account size, position size, or trade count, which makes it the cheapest thing to check about any strategy description: ask what it wins on average, ask what it loses on average, and the ladder above states the win rate that claim requires.
Why does the average outcome differ from my typical outcome?
Multiplying expectancy by the number of trades answers a fixed-dollar question, and almost nobody trades fixed dollars. Once the position is a fixed fraction of equity the results multiply rather than add, and the average and the typical outcome separate. At the default 40% win rate and 2:1 payoff, compounded at 1% of equity over 100 trades, the average path across every possible sequence finishes at x1.22, while the typical (median) path finishes at x1.21. The mean is pulled up by a handful of extreme paths; the median is closer to the account most people would actually be holding.
How much noise is in a 30-trade win rate?
A 40% win rate measured over 30 trades carries a standard error of about 8.9 percentage points, so the honest range is roughly 22% to 58%, which straddles the break-even line for most payoff ratios. Run the numbers twice, once at the measured win rate and once at the low end of that range, and size the smaller one with the position size calculator. If the plan only survives the optimistic version, that is not an edge yet, that is 30 trades. The sample size calculator and the track record significance calculator size exactly this question.
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Position size calculatorCalculatorTurn the risk-per-trade percentage into a share count and a stop distance.Open nextOther questions
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