TradesMatrix Guide
What Is Trading Expectancy?
Trading expectancy estimates the average historical outcome per trade from a defined sample. It depends on both the frequency of wins and losses and their average sizes.
Formula
Expectancy = (Win Rate × Average Win) − (Loss Rate × Average Loss)
Use win and loss rates as decimals, and calculate average loss as a positive amount. Use a consistent net or gross convention across all inputs.
Example
At a 55% win rate, a ₹200 average win, and a ₹150 average loss: (0.55 × ₹200) − (0.45 × ₹150) = ₹42.50 per trade for that sample, before any omitted costs.
Limits
- Historical expectancy can change as market conditions and execution change.
- Include fees and slippage consistently.
- A positive estimate is not a forecast or a guarantee of future results.
Educational information only, not investment or financial advice. Calculator outputs depend on the inputs and assumptions used; they do not predict results or remove trading risk.