The Most Important Number in Your Trading
Expectancy tells you your average expected return per trade. If expectancy is positive, your strategy makes money over time. If it's negative, it loses money — regardless of how the last week felt.
Formula: Expectancy = (Win Rate × Average Win) − (Loss Rate × Average Loss)
Example Calculations
Trader A (Low win rate, large winners):
- Win rate: 40%
- Average win: $400
- Average loss: $150
Expectancy = (0.40 × $400) − (0.60 × $150) = $160 − $90 = +$70 per trade
Trader B (High win rate, small winners):
- Win rate: 70%
- Average win: $80
- Average loss: $250
Expectancy = (0.70 × $80) − (0.30 × $250) = $56 − $75 = −$19 per trade
Trader B wins 70% of trades and loses money. Trader A wins only 40% and profits.
Using Expectancy in Tradapt
Tradapt calculates expectancy automatically for:
- Your overall trade history
- Each individual setup (filter by setup name in Analytics)
- Each session, instrument, and time period
Where to find it: Analytics > Performance > Summary — look for "Expectancy" in the metrics panel.
Expectancy and Trade Frequency
The power of expectancy compounds with the number of trades:
| Trades per Month | +$70 Expectancy | −$19 Expectancy |
|---|---|---|
| 20 | +$1,400 | −$380 |
| 50 | +$3,500 | −$950 |
| 100 | +$7,000 | −$1,900 |
This is why eliminating negative-expectancy setups has such a large impact — each removal eliminates recurring expected losses, and each trade in a positive-expectancy setup adds to expected profits.
The Minimum Sample Size for Reliable Expectancy
Expectancy estimates become reliable at approximately 30–50 trades per setup. Below this, variance can produce misleading readings — a strategy with +$50 expectancy might look like −$20 after only 10 trades by pure chance.
Don't abandon a strategy based on expectancy calculated from fewer than 30 trades.