What is expectancy?
The average profit or loss you can expect per trade for a given setup or ticker.
The average profit or loss you can expect per trade for a given setup or ticker.
Expectancy, explained
Add up the P&L of every closed trade in a group and divide by how many there were. The same number comes from your win rate times your average win, minus your loss rate times your average loss. A positive expectancy means the setup earns over time even with losing trades mixed in; a negative one bleeds you no matter how often it wins small, however good the last one felt. Ranking by expectancy — not by your single biggest win — is how you tell a real edge from luck.
A worked example
10 closed trades net +$1,200 → expectancy +$120 per trade. Or from the rates: 40% of closes win at +$600 and 60% lose at −$200, so (0.40 × $600) − (0.60 × $200) = +$120 per trade.
Where expectancy shows up in a journal
A trading journal is where this stops being a definition and becomes your own number. sizeforzero computes it from the trades you import or log, alongside the rest of your analytics vocabulary, and every figure in the app carries an (i) that explains it in the same plain English you just read.