What is a good trading expectancy?

An expectancy above 0.20R per trade is considered strong. Between 0.05R and 0.20R is profitable but modest. Between 0R and 0.05R is marginal; it may be profitable but offers little room for error. Negative expectancy strategies will lose money over time regardless of risk management.

How many trades do I need to test a strategy?

For statistically meaningful results at 95% confidence with a 5% margin of error, you typically need between 100 and 400 trades depending on your win rate. The calculator shows you the exact minimum for your specific win rate using the formula: (1.96 squared times win_rate times (1 minus win_rate)) divided by 0.05 squared.

What is profit factor in trading?

Profit factor is total gross profit divided by total gross losses. A profit factor above 1.0 means the strategy makes more than it loses. Above 1.5 is considered good. Above 2.0 is excellent. The calculator computes this as (win rate times average win) divided by (loss rate times average loss).

What is a good win rate for a trading strategy?

Win rate alone does not determine profitability. A 40% win rate with an average win of 3R and average loss of 1R has an expectancy of 0.80R per trade, which is significantly better than a 70% win rate with 0.5R wins and 1R losses (expectancy: 0.05R). Use this calculator to evaluate win rate in the context of your R:R ratio.

What is break-even win rate?

The break-even win rate is the minimum win rate needed for your strategy to be profitable given your average win and average loss. It is calculated as: average loss divided by (average win plus average loss). If your actual win rate is above this level, your strategy has positive expectancy.

Is my trading strategy profitable?

Enter your win rate, average win size, and average loss size into this calculator. The verdict badge will immediately tell you whether your strategy has strong edge, is profitable, is marginal, or is not profitable. The statistical significance section tells you whether you have enough trades for the result to be meaningful.

What are R multiples in trading?

An R multiple expresses profit or loss as a ratio of your initial risk. If you risk $100 per trade and win $150, that is a 1.5R win. If you lose $80 (due to a partial stop), that is a 0.8R loss. Using R multiples lets you compare strategy performance independently of account size or position sizing.

Is a profit factor of 1.5 good?

Yes. A profit factor of 1.5 means that for every $1 lost, the strategy earns $1.50, producing a 50% gross edge before costs. Most profitable retail trading strategies have profit factors between 1.3 and 2.0. Above 2.0 is exceptional. Below 1.2 leaves little margin once spreads and commissions are included.

How do prop firms evaluate trader performance?

Prop firms primarily look at drawdown compliance, but the best firms also evaluate expectancy and profit factor when deciding whether to scale up or retain traders. A positive expectancy above 0.10R with a profit factor above 1.3 across 100 or more trades is a strong signal of genuine edge versus luck.

When should I stop trading a strategy?

Stop trading a strategy when (1) it has enough trades to be statistically significant, (2) expectancy has turned consistently negative across different market conditions, or (3) a process error in execution has been identified. Do not abandon a system based on a losing streak alone if the trade count is below the significance threshold shown in this calculator.

Trading Strategy Expectancy Calculator

Find out if your strategy actually has an edge, and whether your current results are meaningful or just early-sample variance.

Win Rate

Measure wins & losses in

Average Win (R)

Average Loss (R)

Strategy verdict

STRONG EDGE

+0.375R

per trade

Your strategy has a clear, measurable edge. Keep trading it consistently.

Profit Factor

1.83

Strong

Min. Win Rate to Break Even

40.0%

You're 15.0% above

Is your data reliable?

Your results become statistically reliable after 381 trades.

Where you stand vs. the break-even line

The dot is your strategy. Above the line = profitable. Below = not profitable.

Fxward Platform

Running a prop firm?

Fxward helps prop firms apply this evaluation automatically: every trader, every account, every day. See which traders actually have an edge.

The formula

Expectancy = (Win Rate × Avg Win) - (Loss Rate × Avg Loss)

Example: 55% win rate, average win 1.5R, average loss 1R. (0.55 × 1.5) - (0.45 × 1) = 0.825 - 0.45 = +0.375R per trade. On 100 trades risking $100 each, that is an expected profit of $3,750.

What is trading expectancy and why win rate alone doesn't tell you anything

Win rate is the most misunderstood metric in trading. A strategy that wins 70% of the time can still be unprofitable if the average loss is 3x larger than the average win. Conversely, a strategy winning only 35% of the time can generate strong returns if winners average 4R and losers average 1R.

Expectancy combines win rate and reward-to-risk into a single number that tells you what you can expect to earn per trade on average. It is the correct metric for evaluating whether a trading strategy has a genuine edge.

How to use this calculator

Enter your win rate, average win size, and average loss size in R multiples (or percentages using the toggle). The calculator instantly shows your expectancy, profit factor, and a plain-language verdict. If you enter trades per month and risk per trade, you will also see monthly and annual return projections.

The significance tracker is the most useful optional feature: enter how many trades you have taken so far to see whether your results have crossed the threshold for statistical reliability.

Win rate vs. reward-to-risk: what actually determines profitability

The table below shows how different combinations of win rate and R:R produce different expectancy values. A cell is green if the combination is profitable, amber if marginal, and red if it is losing money.

Win Rate	0.5R:1R	1R:1R	1.5R:1R	2R:1R	3R:1R
35%	-0.48R	-0.30R	-0.12R	+0.05R	+0.40R
40%	-0.40R	-0.20R	0.00R	+0.20R	+0.60R
45%	-0.33R	-0.10R	+0.13R	+0.35R	+0.80R
50%	-0.25R	0.00R	+0.25R	+0.50R	+1.00R
55%	-0.18R	+0.10R	+0.38R	+0.65R	+1.20R
60%	-0.10R	+0.20R	+0.50R	+0.80R	+1.40R
65%	-0.03R	+0.30R	+0.63R	+0.95R	+1.60R

Expectancy per trade in R multiples. Positive = profitable. Use the calculator for precise numbers at your exact inputs.

Understanding statistical significance in trading

Most traders evaluate their strategy after 20 to 30 trades. This is almost always too early. At 95% confidence with a 5% margin of error, a strategy with a 55% win rate requires approximately 384 trades before conclusions are reliable.

Until you reach that threshold, your results, whether positive or negative, could be explained by random variance. This does not mean you should ignore early results, but it does mean you should weight them appropriately and avoid making major system changes based on small samples.

What is a good profit factor?

Profit factor above 1.5 is generally considered good for a live trading strategy. Above 2.0 is excellent. Below 1.0 means the strategy is losing money in aggregate. A profit factor of exactly 1.0 is breakeven before costs, which means it is unprofitable once commissions and spreads are accounted for.

Profit Factor	Rating	What it means
Below 1.0	Not profitable	Losing money on net
1.0 to 1.2	Breakeven	Unprofitable after costs
1.2 to 1.5	Marginal	Profitable, narrow margin
1.5 to 2.0	Good	Healthy edge
2.0 to 3.0	Excellent	Strong, consistent edge
Above 3.0	Exceptional	Verify sample size is sufficient

When to stop trading a strategy

The decision to stop trading a strategy should not be based on a losing streak or a short run of bad results. It should be based on a systematic review against clear criteria.

The trade count has crossed the statistical significance threshold and expectancy is still negative.

You can identify a specific execution or process error that has changed your real-world results versus your system rules.

Market conditions have structurally changed in a way your edge specifically relied on.

Your drawdown has hit a pre-agreed circuit breaker set before you started trading.

Also useful

Losing Streak Calculator

How likely is your current losing streak at your win rate?

Portfolio Risk Calculator

Total risk across all open positions, with currency exposure.