Expectancy Calculator

What is the Expectancy Calculator?

The Expectancy Calculator is a valuable tool designed to help traders analyze their trading strategies. By inputting your average win rate and risk-to-reward ratio, you can gain insights into the potential profitability of your future trades. The calculated expectancy provides a quantitative measure that can guide your decision-making process and aid in effective risk management. A higher calculated expectancy often indicates a more favorable outlook for your future trades. It is important to recognize that all trading involves inherent risks, and outcomes can vary. Traders should exercise their discretion and consider their individual risk tolerance.

Who is the Expectancy Calculator for?

The Expectancy Calculator is a versatile tool that caters to both novice and experienced traders alike. For beginners, it provides a valuable resource to assess their market edge before entering trades. This ensures they're equipped with a competitive advantage from the start. Seasoned traders, on the other hand, can leverage the calculator to evaluate and compare various trading strategies. By gauging the potential profitability of different approaches, they can identify which strategies hold the greatest potential for profit. Whether you're just starting out or a seasoned pro, the this can help you make more informed trading decisions and optimize your trading journey.

How do I use the Expectancy Calculator?

Risk : Reward: Every trade you enter has a Risk : Reward (R:R) ratio. For example: if you enter a trade with a 10 pip stop loss and a 20 pip take profit, your R:R is 1:2. For the calculator, all your need is your reward since there is a standard 1 risk already set. You can determine your reward per 1 risk by diving your take profit in pips/point/handles by your stop loss in pips/points/handles. For the best results, log your trades and their respective R:R ratios and use the average reward.

Win Rate: Every strategy has a win rate percentage (amount of times it wins per 100 trades). For example: if you enter and exit 100 trades and win 80 of them, your win rate is 80%. You can determine your win rate by dividing your amount of wins by your total number of trades. The more trades you take with a specific strategy, the more accurate your win rate will become. For the best results, log your trades and keep track which ones were winners and which ones were losers.

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Remember, the more data you have about your trades and your personal trading strategy, the more accurately we can provide an expectancy.