MTS Institute / Expectancy and risk reward calculator
Expectancy and risk reward calculator
From win rate, average win and average loss, see expectancy per trade, risk reward and breakeven win rate.
How it works
Expectancy is what a system makes on average per trade. Formula: expectancy = win rate × average win minus loss rate × average loss.
Example: winning 40 percent of trades with an average win of 3,000 and an average loss of 1,000 gives an expectancy of 600 per trade. A system can win less than half its trades and still make money.
Questions
What is a good expectancy?
Any positive expectancy means the system makes money on average. Higher is better, but it must hold up in testing over many trades.
Why does win rate alone mislead?
A high win rate with small wins and big losses can still lose money. Expectancy combines both, so it tells the real story.
Related calculators
Numbers are the start. A tested system tells you what to do with them. Learn it free in five short lessons.
Take the free course →For education only. Results are estimates based on the numbers you enter and are not investment advice.