Expectancy

In plain English

Combines win rate with average win and average loss. Usually expressed in R so it is comparable across instruments.

Example

(win rate x average win) - (loss rate x average loss).

See also

• Win rate
• Sample size
• Drawdown

Used in these lessons

• Why Risk Comes First
• Why Discipline Fails
• Building a Review Routine
• Anatomy of a Trading Plan
• Backtesting and Forward Testing
• Journaling and Metrics