Trade Expectancy Calculator
Calculate mathematical expectancy per trade and projected return over a series of executions.
How the Calculation Works
Read parameters and compute total exposure: multiply order quantity by contract unit multiplier.
Evaluate terminal return at the selected target price using strict financial mathematical boundary logic.
Deduct upfront capital commitments, taxes, or net debits to produce final net profit or loss realization.
Calculation Formula
Example Calculation
55% win rate, ₹2,500 avg win, ₹1,200 avg loss.
Every trade generates an expected positive mathematical value of ₹835.
Assumptions & Parameters
- Expectancy represents long-term statistical average across a statistically significant sample.
Frequently Asked Questions
What is trading expectancy?
The average amount of money you expect to win or lose per trade over time based on historical win rate and payoff sizes.
Does positive expectancy guarantee individual trade profit?
No. Individual trade outcomes are probabilistic; expectancy only materializes across a large series of executions.
How can I improve my trading expectancy?
By increasing your win rate, increasing average win size (running winners), or decreasing average loss size (cutting losers quickly).
What is the difference between win rate and expectancy?
Win rate measures trade frequency; expectancy measures actual rupee value generated per trade.
How many trades are needed to verify expectancy?
A sample size of at least 50 to 100 trades is recommended to minimize random luck variance.
Can a system with a 40% win rate have positive expectancy?
Yes, if average winning trades are significantly larger than average losing trades (e.g. 1:3 payoff).