Trading Expectancy Calculator
Find out if your trading strategy has a positive edge. Calculate expected profit per trade, monthly, and annual projections.
Free — no signup, no ads, instant results
Inputs
Results
Expectancy Per Trade
+$65.00
Monthly Expected Profit
+$1300.00
Annual Projection
+$15600.00
Profit Factor
2.44
Your strategy has a positive edge. On average, each trade nets $65.00.
Who Is This For?
This calculator is for traders who want to know whether their strategy actually makes money over time. Whether you trade forex, stocks, crypto, or options, expectancy tells you the average dollar amount you earn (or lose) per trade. It is the single most important number for determining if a strategy has a real edge or is just getting lucky.
When to Use This Calculator
- After backtesting a strategy — to quantify the edge before risking real money
- During live trading — to track whether your strategy still has a positive expectancy
- When comparing strategies — the one with higher expectancy per trade is mathematically superior
- Before scaling up — positive expectancy is a prerequisite for increasing position size
Formula
Expectancy = (Win Rate x Avg Win) - (Loss Rate x Avg Loss)
Profit factor is the ratio of gross profit to gross loss:
Profit Factor = (Win Rate x Avg Win) / (Loss Rate x Avg Loss)
A profit factor above 1.0 means the strategy is profitable. Above 1.5 is good, above 2.0 is excellent.
Worked Example
Scenario: A swing trader has a 45% win rate. Average winning trade is $300, average losing trade is $120. They take 15 trades per month.
Step 1: Expectancy = (0.45 x $300) - (0.55 x $120) = $135 - $66 = $69 per trade.
Step 2: Monthly projection = $69 x 15 = $1,035/month.
Step 3: Profit factor = $135 / $66 = 2.05 — an excellent edge.
Result: Despite winning less than half the time, this strategy generates strong positive expectancy because the average win is 2.5x the average loss.
Assumptions & Edge Cases
- Assumes each trade is independent — correlated losses (e.g., holding multiple positions in a crash) can invalidate projections
- Monthly and annual projections assume consistent trade frequency and stable win rate
- Does not account for compounding — use the Compound Interest Calculator for growth projections
- Negative expectancy does not mean every trade loses — it means you lose money over a large sample
- Results are most reliable with 100+ trade samples
Frequently Asked Questions
Trading expectancy is the average amount you expect to win or lose per trade over many trades. A positive expectancy means your strategy is profitable long-term. The formula is: Expectancy = (Win Rate x Avg Win) - (Loss Rate x Avg Loss).
Any positive expectancy means your strategy has an edge. The dollar value depends on your trade size. More useful is looking at expectancy relative to your average risk — an expectancy of 0.5R means you make half your risk amount on average per trade, which is excellent.
Win rate only tells you how often you win. Expectancy combines win rate with the size of your wins and losses. A 90% win rate with tiny wins and huge losses can have negative expectancy. A 35% win rate with large wins and small losses can have strong positive expectancy.
A minimum of 100 trades is recommended for a statistically meaningful expectancy calculation. With fewer trades, your results may be dominated by luck rather than edge. 200+ trades gives higher confidence.