Definition
The average net outcome of each closed trade.
Formula. Net realized P&L ÷ number of closed trades. Includes break-even trades and fees.
Expectancy against frequency
| Expectancy per trade | Trades per month | Expected monthly result |
|---|---|---|
| $12 | 200 | $2,400 |
| $95 | 20 | $1,900 |
| $4 | 500 | $2,000 — before slippage and cost drift |
How it goes wrong
- Computing it gross
- Expectancy must be net of commissions and fees. Orderblock includes recorded fees and break-even trades in the calculation.
- Assuming it is stable
- Expectancy drifts with market regime, spread and your own discipline. Recompute it per quarter and per strategy rather than quoting one lifetime figure.
- Mixing position sizes
- Money expectancy across wildly different position sizes describes sizing as much as edge. Use realized R alongside it when size varies.
Questions
How is expectancy different from average win?
Average win only looks at winners. Expectancy divides the whole net result, losses and break-evens included, by every closed trade. It is the honest per-trade number.
Can expectancy be negative while I am profitable?
Not over the same sample. If your account grew while expectancy was negative, the growth came from deposits or open positions, neither of which is in this metric.