Expectancy: why win rate lies

3 min read · educational content, not investment advice

"I win most of my trades" is the most expensive sentence in retail trading. Win rate on its own says almost nothing.

The formula

Expectancy = (win rate × average win) − (loss rate × average loss)

Worked example: 60% win rate, average win $300, average loss $500.

The uncomfortable corollary

A 35% win rate with a 3:1 reward-to-risk ratio earns far more than that example. Which is why "I hate cutting winners short" and "I let losers run" are the same problem described from two sides.

Track it, do not estimate it

Most people significantly misremember both their average win and average loss. The review page computes all of it from your journal — including the split between trades that followed your plan and trades that did not, which is the number that tells you whether to fix the strategy or the execution.

Related reading
Put it to work
Review page Trade journal Paper account