What Is Expectancy? Formula, Example, Real Data

Expectancy is the average result of a single trade, expressed in currency or in pips: what the account earns, on average, every time it opens a position. It is built from four numbers — win rate, average win, loss rate, average loss — and it answers "does this system make money per trade" in units you can multiply by a trade count. Positive expectancy repeated often enough is a business; negative expectancy is a countdown.

How it works

Expectancy = (Win Rate × Avg Win) − (Loss Rate × Avg Loss)

Loss Rate = 1 − Win Rate

A system that wins 40% of the time, makes $300 on a winner and loses $100 on a loser: (0.40 × $300) − (0.60 × $100) = $120 − $60 = +$60 per trade. Four hundred trades a year is $24,000 of expected result, before position size changes and before anything goes wrong.

The same formula written in R multiples, where R is one average loss, strips out the account currency and makes systems comparable:

Expectancy (R) = (Win Rate × Payoff) − (1 − Win Rate)

Payoff = Avg Win / Avg Loss

Two things decide whether the output means anything. First, costs must already sit inside the inputs: spread, commission and swap come out of every trade, shrinking each winner and enlarging each loser. Second, the averages need enough trades that one outsized result cannot set them.

Why it matters

Expectancy is the bridge between a statistic and a plan. Profit factor tells you the ratio of money won to money lost; expectancy tells you what one more trade is worth, which is the number you multiply by frequency to get an expected month.

It also exposes the trade-off that a win rate hides. A win rate is only half of an edge — the other half is the risk-reward ratio, and expectancy is where the two meet. Move either one and the result moves; keep both and no amount of narrative changes it.

And it sets the cost floor. If a strategy expects +$8 a trade and the round-turn spread and commission cost $7, what is left is not a strategy.

What the data shows

The figures below describe accounts published on ShowMyTrades, not traders in general. Take the middle of the published accounts that have trading history (August 2026): a median win rate of 68.8%, a median profit factor of 1.28 and a median of 171 closed trades.

Those numbers pin the expectancy of that middle account. Inverting the profit factor formula gives an average winner worth about 0.58× its average loser, and the R form turns the rest into arithmetic: (0.688 × 0.58) − 0.312 = +0.087R. Nine hundredths of one average losing trade, per trade taken. Over 171 trades the entire record adds up to roughly fifteen average losses' worth of profit — which is why the median time-weighted return is only +3.2% despite nearly seven trades in ten closing green.

Costs are not a rounding error at that thickness. Published accounts have paid $4,782,670 in commissions and $862,547 in swap, and 86.3% of the accounts that carry swap at all pay net negative swap. At a median trade length of 2.4 hours, an edge of 0.087R survives only if the cost of a round turn stays small against the average loss.

Where you see it on ShowMyTrades

Expectancy is a row in the Advanced Statistics module on every published account page, inside the Performance Metrics group. It prints both units on one line — pips first, then account currency — because a pip figure travels between symbols and a currency figure travels between position sizes, and neither alone is complete.

Its four inputs are in the Trades group of the same module: Win Rate, Avg. Win, Avg. Loss and Total Trades, next to Avg. Trade Length, which says whether a thin per-trade edge is being earned in hours or in weeks. The costs already deducted appear as Total Commissions and Total Swap Paid, with the per-trade detail in the trades table under Profit (Gross), Swap and Commission.

To test whether an expectancy is one edge or an average of several, the Custom Analysis slideover recomputes the whole block on a filtered subset — by symbol, magic number, direction, date range, weekday or hour — and Advanced Statistics adds Weekday, Hourly and Duration views that split the same result without any filtering.

Common misunderstandings

• "Positive expectancy means I will make money." It means the average trade is profitable. Size the positions wrong and a positive-expectancy system still ends at zero: survival is a position sizing question, not an expectancy one.
• "Expectancy is just my average trade." Only if the average is taken net. Computed on gross profit it ignores commission and swap, which is exactly where thin edges disappear.
• "A high win rate implies positive expectancy." It implies nothing on its own. At a 0.58 payoff, a 60% win rate is a losing system.
• "The number is stable." On a few hundred trades it is not. One outsized winner can lift a whole record's expectancy, and removing it is a fair test.

For the metrics worth tracking over time and the order to read them in, see the guide to tracking trading performance.

Related terms