Expectancy and win rate

What it is

Expectancy is what you make on average per trade: (win rate × average win) − (loss rate × average loss). In R terms, a 40% win rate with 2R winners and 1R losers gives 0.4 × 2 − 0.6 × 1 = +0.2R per trade.

Win rate alone says nothing: a 70% win rate with tiny wins and big losses can still lose money. Profit factor (total won ÷ total lost) is another way of seeing the same thing; above 1 is profitable.

How to spot it

• Track every trade's result in R so the maths is honest.
• Judge it over a big sample, ideally 50–100+ trades, not a good week.

How to use it

• Use expectancy to compare setups and drop the ones that don't pay.
• UNFLD's Analytics shows win rate, profit factor, expectancy and average win against average loss for you.

Common mistakes

• Chasing a high win rate by taking profit too early.
• Judging a strategy on a handful of trades.

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