The formula
Expectancy = (Win % × Average Win) − (Loss % × Average Loss)
Expectancy is the average amount you can expect to win or lose per trade, over a large enough sample. A positive expectancy means the strategy pays you on average, even though any individual trade can still lose. A negative expectancy means the opposite — you can string together winning weeks purely on variance before the math catches up.
Why win rate alone is misleading
A 70% win rate sounds strong until the average loss is five times the average win — that combination is still a losing strategy over time. Expectancy is what forces win rate and win/loss size to be judged together instead of separately.
This calculator uses the win rate and average win/loss you type in. To see your actual expectancy calculated automatically from your real trade history — along with the same number broken down by strategy, symbol, and session — import your trades into ExpectancyIQ free to start.
Sizing the position that produced those wins and losses? Try the position size calculator, or read more on why expectancy matters in Why Keep a Trading Journal?.