Expectancy
Expectancy is the average amount you can expect to win or lose per dollar risked across all your trades. Positive expectancy means your strategy makes money in the long run; negative expectancy means it loses.
Formula
Example: Win rate 50%, average win $200, average loss $100: Expectancy = (0.5 × $200) − (0.5 × $100) = $50 per trade.
Why it matters for traders
Expectancy is the single most important metric for evaluating whether a trading strategy has an edge. A positive expectancy strategy will be profitable in the long run as long as you can execute it consistently.
How Tradapt tracks this
Tradapt calculates your expectancy automatically and shows how it trends over time. If your expectancy is declining, the AI Coach will flag it and help you identify which change in your behaviour is responsible.
Track this free in TradaptFrequently asked questions
What is positive expectancy in trading?
Positive expectancy means your average trade makes money. If you have positive expectancy, you will be profitable over a sufficient number of trades — even if individual trades lose.
How do I improve my trading expectancy?
Improve win rate (by being more selective with setups), improve average winner (by letting winners run further), or reduce average loser (by cutting losses earlier). Journaling in Tradapt helps you identify which lever to focus on.