Trading metric
Trading expectancy
Expectancy is the one number that answers the only question that matters: over many trades, does this strategy make money? It folds win rate and trade size into a single figure — the average you earn per trade.
What it is
Expectancy is the average profit or loss you can expect from a single trade, given your win rate and the typical size of your wins and losses. A positive expectancy means the strategy makes money over a large enough sample; a negative one means it loses, no matter how good any single trade felt.
It is the metric that finally settles the win-rate argument. Win rate and risk-reward each describe one half of an edge; expectancy multiplies them together and tells you the net. This is why a 40% win rate with large winners can beat a 70% win rate with large losers — expectancy sees what the win rate alone hides.
Expectancy is often expressed per dollar risked, or in R (multiples of the amount risked per trade). Stated in R, an expectancy of +0.3R means that, on average, every trade returns three-tenths of what you risked — a clean, position-size-independent way to compare strategies.
How to measure it
You need four numbers from your trade history: win rate, loss rate, average win, and average loss. The formula combines them into the expected value of one trade.
Expectancy = (win% × average win) − (loss% × average loss)
- 1
Pull your closed trades over a meaningful sample — at least several dozen, ideally more.
- 2
Compute win rate and loss rate (loss rate is 1 minus win rate, with scratches handled consistently).
- 3
Compute the average winning trade and the average losing trade, both as positive amounts.
- 4
Multiply win rate by average win, subtract loss rate times average loss. The result is expectancy per trade in currency.
- 5
To express it in R, divide each trade result by the amount you risked on it first, then average — this removes position size and makes strategies comparable.
Worked example
You win 45% of trades. Your average winner is 2.2R and your average loser is 1.0R. Expectancy in R = (0.45 × 2.2) − (0.55 × 1.0) = 0.99 − 0.55 = +0.44R. Every trade is worth, on average, 0.44 times what you risk. Over 200 trades at a steady risk unit, that edge compounds — provided the behavior that produced those averages holds.
What good looks like
Any positive expectancy that holds up across a real sample is a genuine edge, and it compounds with the number of trades you take. The size matters less than the sign and the stability: a small, reliable +0.2R repeated with discipline beats a flashy +1R that only appears in a handful of cherry-picked trades.
The honest version of this metric demands a large sample and a stable risk unit. Expectancy computed over fifteen trades, or over trades where your risk per trade swung wildly, is not a measurement — it is an anecdote with a decimal point.
Negative
The strategy or its execution loses over time. No amount of position sizing or psychology rescues a negative edge — the edge itself has to change.
Small positive (≈ +0.1 to +0.3R)
A real, workable edge. Compounds well with volume and tight risk control; most durable retail edges live here.
Large positive (> +0.5R)
Strong, but verify the sample size and that risk per trade was consistent before trusting it. Easy to overstate from a lucky stretch.
What moves it
Inconsistent position sizing
If your risk per trade jumps around, a few large bets dominate the average and expectancy stops describing the strategy. A fixed-fractional risk unit is what makes the number trustworthy.
Behavior that breaks the edge
A strategy can backtest to +0.4R and trade to negative because the trader cuts winners and holds losers. Expectancy measures the strategy as executed, not as designed — the gap is behavioral.
Too small a sample
Expectancy over a handful of trades is noise. A positive edge can show negative over twenty trades and a negative edge can look brilliant over ten. Conclusions need a few hundred trades, not a good week.
Letting one outlier set the average
A single giant win or catastrophic loss can swing the average and hide the typical trade. Watch the median and the distribution, not just the mean, so one outlier does not write the story.
How Mettle tracks it
Mettle assembles the four inputs from your logged trades and shows expectancy as your sample grows, so you can watch whether your real, executed edge is positive — not just your intended one.
Win rate, average win, and average loss come straight from imported fills, so the dashboard computes expectancy without manual spreadsheet work.
Because Mettle holds the planned risk from your trade plan, it can express expectancy in R, making strategies and plays comparable regardless of size.
Review tags let you split expectancy by behavior, so you can see what your edge looks like on plan-followed trades versus the ones you forced.
The tags and execution notes are self-reported — Mettle counts what you log honestly, it does not reconstruct your decisions from the tape.
FAQ
What is a good expectancy in trading?
Any positive expectancy that survives a large sample is a real edge, and it compounds with trade count. Expressed in R, many durable retail edges sit around +0.1 to +0.3R per trade. The sign and the stability matter far more than chasing a big number from a small, flattering sample.
How is expectancy different from win rate?
Win rate is how often you win; expectancy is how much you make per trade on average, combining win rate with the size of wins and losses. A high win rate can have negative expectancy if losers are large. Expectancy is the metric that actually tells you whether the strategy is profitable.
Does Mettle calculate this automatically or do I report it?
The number itself is arithmetic on your logged fills, so Mettle computes it for you on the dashboard. What stays self-reported is the behavioral side — the tags and execution notes you add in review — because only you know whether you followed the plan. The copy never pretends otherwise.
Is Mettle free to start?
Yes. You get full access free for 14 days with no card. We only ask for a card once you have reviewed three sessions — after the product has proven it earns a place in your routine.
Watch your real expectancy build
Import your trades and Mettle tracks expectancy as your sample grows — in R, split by behavior — so you can tell a genuine edge from a good month.
Start free — no cardMore trading metrics
Want the workflow behind the numbers? Read the matching guide.