Trading guide · trading expectancy
Trading Expectancy Explained: Why 40% Can Beat 70%
Learn the trading expectancy formula and why win rate alone can mislead beginners.
Most beginners judge a strategy by win rate. Expectancy gives you a more useful view: what the average result may look like across a meaningful sample.
What to remember
- Expectancy = (win rate × average win) − (loss rate × average loss).
- A 40% win rate can work when winners are much larger than losers.
- Evaluate a strategy over repeated, comparable trades—not a handful of outcomes.
A strategy does not need to win constantly. It needs positive expectancy and disciplined execution.
Trading is probabilistic. No setup guarantees a result, and this guide is educational rather than financial advice. Build a process, define risk before entry, and review your decisions honestly.
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