Trader Toolkit · Calculator

Expectancy

What one trade comes to on average, and the win rate that only breaks even.

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Wins and losses, weighed and summed:what the average trade has come.

A set of finished trades, as four figures

Result

Win rate

The share of trades that gained. A placeholder until you type yours.

Account currency

Average win

The mean of the gaining trades. A placeholder.

Average loss

The mean of the losing trades, as a positive amount. A placeholder.

Cost per trade (optional)

Zero if your averages are already after costs.

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Expectancy per trade

+35.00 USD

the average of the trades these figures describe

Per unit risked

+0.35

for each 1 USD of average loss

Payoff ratio (average win ÷ average loss): 2.00
Break-even win rate before costs: 33.33%
Break-even win rate after costs: 33.33%
Your win rate, against the break-even after costs: 45% against 33.33%

The shaded part is the range of win rates at which these averages lose money after costs; the line is the win rate you typed.

SimulationA calculation on the figures you entered. An average of trades that are over, on the figures you typed. It is not an edge to rely on and says nothing certain about the next trade. Educational information, not investment advice or a recommendation to trade.

How it works

Formula

E = p × average win − (1 − p) × average loss − cost; per unit risked = E ÷ average loss; break-even win rate = (average loss + cost) ÷ (average win + average loss)

With your numbers

1What the wins contribute (win rate × average win)0.45 × 200.00 = 90.00 USD
2What the losses take (loss rate × average loss)0.55 × 100.00 = 55.00 USD
3Expectancy per trade, less the cost of a trade90.00 − 55.00 − 0.00 = +35.00 USD
4Per unit risked (expectancy ÷ average loss)35.00 ÷ 100.00 = 0.35
5Payoff ratio (average win ÷ average loss)200.00 ÷ 100.00 = 2.00
6Break-even win rate: (average loss + cost) ÷ (average win + average loss)(100.00 + 0.00) ÷ (200.00 + 100.00) = 33.33%

Assumptions

The four figures are yours: a win rate and two averages taken from trades that are over, for example from a journal. They describe those trades. They are not a property of the next one.
The average loss is taken as the amount risked, so “per unit risked” is the expectancy divided by the average loss. If your losses are usually smaller or larger than the risk you planned, the two differ.
Cost per trade is for averages counted before costs: the spread, commission and swap of one trade, which the Cost Lab adds up. If your averages already come from statements after costs, leave it at zero or the cost is counted twice. No GIO4X cost is prefilled.
An average hides the spread of results. Two methods with the same expectancy can have very different runs of losses on the way.
The starting figures are placeholders that make the working visible. They do not describe any method.

Terms used

In plain language

An average of what has happened, split into its parts.

Expectancy is the result of the average trade. Take the share of trades that gained and multiply it by the average gain; take the share that lost and multiply it by the average loss; subtract the second from the first, and then the cost of a trade if the averages were counted before costs. What is left is what one trade came to, on average.

Dividing it by the average loss turns it into a figure per unit risked, which lets two sets of trades of different sizes be compared. The break-even win rate comes from the same expression set to zero: the share of trades that must gain for these averages to come to nothing. Costs push it up, and the page shows it before and after them.

The four inputs are measurements of trades that are over. A win rate from thirty trades can be far from the one the next thirty will show, by chance alone, and an average says nothing about the order in which results arrive. A positive figure here is arithmetic on the past, not an edge to count on.

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How it works

Formula

E = p × average win − (1 − p) × average loss − cost; per unit risked = E ÷ average loss; break-even win rate = (average loss + cost) ÷ (average win + average loss)

With your numbers

1What the wins contribute (win rate × average win)0.45 × 200.00 = 90.00 USD

2What the losses take (loss rate × average loss)0.55 × 100.00 = 55.00 USD

3Expectancy per trade, less the cost of a trade90.00 − 55.00 − 0.00 = +35.00 USD

4Per unit risked (expectancy ÷ average loss)35.00 ÷ 100.00 = 0.35

5Payoff ratio (average win ÷ average loss)200.00 ÷ 100.00 = 2.00

6Break-even win rate: (average loss + cost) ÷ (average win + average loss)(100.00 + 0.00) ÷ (200.00 + 100.00) = 33.33%

Assumptions

The four figures are yours: a win rate and two averages taken from trades that are over, for example from a journal. They describe those trades. They are not a property of the next one.

The average loss is taken as the amount risked, so “per unit risked” is the expectancy divided by the average loss. If your losses are usually smaller or larger than the risk you planned, the two differ.

Cost per trade is for averages counted before costs: the spread, commission and swap of one trade, which the Cost Lab adds up. If your averages already come from statements after costs, leave it at zero or the cost is counted twice. No GIO4X cost is prefilled.

An average hides the spread of results. Two methods with the same expectancy can have very different runs of losses on the way.

The starting figures are placeholders that make the working visible. They do not describe any method.

Terms used