What Is Expectancy? Your System's Average R per Trade

Expectancy is the average R-multiple a system earns per trade, measured across many trades. It answers the only question that matters long-term: for every rupee I risk, how much do I make back on average?

Expectancy (R) = (Win% × Average Win in R) − (Loss% × Average Loss in R)

Why win rate alone lies

A high win rate feels good but says nothing about profitability. You can win 70% of trades and still lose money if the 30% of losers are large. Expectancy combines how often you win with how much you win or lose, so it captures the full picture.

A worked example

Metric	Value
Win rate	40%
Average win	+2R
Average loss	−1R
Expectancy	+0.2R per trade

Only 40% of trades win, yet expectancy is positive: (0.40 × 2) − (0.60 × 1) = +0.2R. Over 100 trades that is roughly +20R — proof that a "losing more often than not" system can still be profitable.

How to use it

• Compare setups — the one with higher expectancy earns more per unit of risk.
• Need a sample — expectancy is only meaningful over a few dozen trades or more; a handful tells you nothing.
• Pair it with sizing — expectancy is measured in R, so consistent position sizing is what turns a positive number into steady rupees.