Expectancy is the average profit per trade. A positive value means the EA has an edge that compounds the more it trades.
Expectancy is the average net profit per trade. If positive, the EA is considered to have a statistical edge.
Expectancy = (win rate × avg win) − (loss rate × avg loss) = net profit ÷ total trades
How to read it
- Positive: equity is expected to grow as trades accumulate.
- Near zero: a thin edge, easily eaten by costs (spread etc.).
- Negative: it loses the more it trades.
Notes
- Unstable with few trades. Expectancy only becomes meaningful over many trials.
- Even a small per-trade expectancy adds up with high frequency (scalping). Low frequency takes longer to compound.
- It is the product of risk-reward and win rate.
