Free tool
Trading expectancy calculator.
Win rate alone doesn't tell you whether a strategy makes money. Expectancy does: the average result of one trade, in R. Put in your numbers, or start from a reward to risk ratio and see the win rate it needs.
What is my expectancy?
From your backtest or journal. Losses are usually 1R if you size by risk.
What win rate do I need?
Start from the reward to risk you plan to trade, with losses at 1R.
Reference
The win rate each reward to risk needs. Losses at 1R, before spreads and commissions.
| Reward to risk | Break even | For +0.2R a trade | For +0.5R a trade |
|---|---|---|---|
| 0.5R : 1R | 66.7% | 80.0% | not reachable |
| 1R : 1R | 50.0% | 60.0% | 75.0% |
| 1.5R : 1R | 40.0% | 48.0% | 60.0% |
| 2R : 1R | 33.3% | 40.0% | 50.0% |
| 2.5R : 1R | 28.6% | 34.3% | 42.9% |
| 3R : 1R | 25.0% | 30.0% | 37.5% |
| 4R : 1R | 20.0% | 24.0% | 30.0% |
The method
How the numbers are computed.
Expectancy is win rate × average win − loss rate × average loss, in R. Profit factor is gross profit divided by gross loss, so anything above 1 made money. The break even win rate for a payoff of W to L is L divided by W plus L.
All three describe the trades you put in, not the future. A win rate from a backtest is an estimate, and how loose it is depends on how many trades it rests on: check yours with the sample size calculator. To see what an edge means for your account, run it through the risk of ruin calculator, and read how many trades you need to backtest a strategy for why expectancy needs more data than win rate.
FAQ
Frequently asked questions.
The average result of one trade. In R, it is win rate × average win − loss rate × average loss, where 1R is the amount risked. A 40% win rate with 3R winners and 1R losers gives 0.4 × 3 − 0.6 × 1 = +0.6R a trade. It combines how often you win with how much you win, which is why it decides whether an account grows and win rate alone does not.
Yes, for judging a strategy. A 70% win rate with 0.5R winners earns +0.05R a trade, while a 40% win rate with 3R winners earns +0.6R, twelve times as much. Win rate still matters for how the strategy feels to trade: lower win rates mean longer losing streaks, which you can check with the losing streak calculator.
One divided by one plus your reward to risk ratio, before costs. At 1:1 that is 50%, at 2:1 about 33.3%, at 3:1 25%. Spreads and commissions push the real break even a little higher, more so on strategies with small targets.
More than for a win rate, because expectancy also depends on how big each win and loss is, and that varies. A few dozen trades can show a positive expectancy by luck. Put error bars on your win rate first with the sample size calculator: if the interval around it still includes your break even win rate, the expectancy is not established yet.
Get your expectancy from the trades you actually took. On every plan, BacktestFlow's Verdict section computes expectancy, profit factor and average R from your replay, and the replay waits until each trade is recorded, so none go missing from the sample.
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