Close Menu
Join our channel
Ad

Your strategy

Trading Expectancy Calculator

Win rate alone says nothing. Combine it with your average win and average loss to see what each trade is worth on average, what that means over a month, and how long a losing streak you should be ready for.

%
R
R
%

R = the amount risked on a trade. A loss at your full stop is 1R; a win twice that size is 2R.

How it works

Expectancy is the average result of one trade, in R (multiples of your risk). Positive expectancy means the strategy makes money over enough trades; negative means no position sizing can save it.

Even a solid strategy produces long losing streaks. The streak estimate shows the run of losses you are likely to see over your sample of trades, so you can size small enough to survive it.

Formulas

  • Expectancy (R) = Win rate × Avg win − (1 − Win rate) × Avg loss
  • Monthly result ≈ Expectancy × Trades per month × Risk per trade
  • Kelly fraction = Win rate − (1 − Win rate) ÷ (Avg win ÷ Avg loss)
  • Likely longest losing streak ≈ ln(Trades) ÷ −ln(1 − Win rate)

Questions traders ask

Should I bet the full Kelly fraction?

Almost nobody should. Full Kelly assumes your win rate and payoff are known exactly, and it produces deep drawdowns. Many traders use a quarter to half Kelly at most, and most simply risk 0.5 to 2% per trade.

For educational purposes only, not financial advice. Results are estimates based on the formulas shown; your exchange may calculate margin, fees and funding differently. Trading leveraged products can lose more than you expect.