Glossary / Performance metrics
Expectancy
Definition
The average profit or loss you can expect from each trade over a large sample.
Why it matters
Expectancy folds win rate and payoff into one number, which is why it is the fairest single measure of an edge. It only becomes stable after roughly 100 trades.
Formula
Expectancy = (Win% x Average Win) - (Loss% x Average Loss)
Example
45% win rate, $220 average win, $130 average loss gives (0.45 x 220) - (0.55 x 130) = $27.50 per trade.
How to track it in a journal
TradeStack calculates the core performance numbers — win rate, average win and loss, profit factor, expectancy, drawdown and consistency — automatically from imported trades, so expectancy stops being something you estimate and becomes something you read.
Related terms
Questions that use this term
Keep reading
Trading journal guides
Expectancy, profit factor, drawdown, backtesting and the PDT rule.
Free trading calculators
Position size, risk-reward, expectancy and options profit.
Expectancy calculator
Expected profit per trade from your own numbers.
Broker CSV export guides
Step-by-step exports for Tradovate, NinjaTrader, IBKR and more.
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