Every position carries a per trade price tag: how much the strategy expects to win or lose each time it is entered. The Trading Expectancy Calculator defaults to a 55 percent win rate, a 200 average win, a 100 average loss and 100 trades, and returns 65.00 of expectancy per trade, 6,500 across the batch, a 1 : 2.00 risk reward ratio and a 33.3 percent break even win rate, flagged as positive edge.
The formula: win rate and reward in one number
Expectancy is the signed average of a single trade: win rate times average win minus loss rate times average loss. At the defaults that is 0.55 times 200 minus 0.45 times 100, or 110 minus 45, which is 65.00 per trade. The 2.00 ratio behind it is exactly what the Risk/Reward Ratio Calculator prints from a stop and a target. Multiply by the trade count and the same 65.00 becomes 6,500 over 100 trades, 650 over 10 and 65,000 over 1,000. The gross side of the ledger is 11,000 won against 4,500 lost, and the ratio of those totals is the 2.4444 that the Profit Factor Calculator reports, safely above the 1.0 line that separates money makers from money losers.
Break even win rate: the 33.3 percent line
Break even asks what win rate makes expectancy exactly zero, and it depends only on the reward ratio: 100 divided by ratio plus 1. At 1 : 2.00 that is 33.3 percent, so the default 55 percent sits 21.7 points above the line. The tool shows the knife edge: type 33.3 and the expectancy prints -0.10, because 33.3 percent is a hair below the exact one third; at 30 percent the number is -10.00 and the edge label flips to negative. The same win rate and ratio feed the Kelly Criterion Calculator, which turns them into a stake fraction.
Win rate and reward: the two levers
Both levers pull expectancy in the same direction. With the reward fixed at 1 : 2.00, the win rate drives 60 percent to 80.00 per trade, 50 percent to 50.00, 40 percent to 20.00 and 30 percent to -10.00. With the win rate fixed at 55 percent, the reward ratio does the same work: 1 : 1.50 drops expectancy to 37.50 and lifts break even to 40.0 percent, 1 : 2.50 raises expectancy to 92.50 and drops break even to 28.6 percent, and 1 : 1.00 leaves 20.00 with a 50.0 percent break even. Whichever lever moves, the Position Sizing Calculator is where the resulting expectancy sets the stake.
The average hides the swing
One trade can win 200 or lose 100 around a 65.00 average, so single results scatter far from the mean: the variance per trade is 22,275 and the standard deviation about 149.25. Over a 100 trade batch the mean is still 6,500, but the batch standard deviation is 1,492.48, so a minus one standard deviation run lands near 5,007.52 and a plus one near 7,992.48. A trader with a genuine edge can endure runs that look exactly like a losing strategy; the Drawdown Calculator sizes how deep those runs typically go before the average reasserts itself.
From expectancy to stake
Expectancy answers whether a system is worth running; sizing answers how much to commit. The Kelly fraction for the defaults is win rate minus loss rate over ratio: 0.55 minus 0.45 over 2, or 0.325 of the bankroll, which practitioners usually halve. Run that stake over 1,000 trades and the 65.00 per trade adds up to the 65,000 total above, while the Monte Carlo Stock Simulator style resampling of the same win and loss distribution shows the spread of paths around it.
Where expectancy sits in the workflow
In a real process the expectancy check is the gate before any sizing: compute it from the last hundred trades, compare the win rate to the 33.3 percent break even line, then let the Kelly math size the stake and the stop and target set the exit. The Kelly Criterion guide walks through the sizing step that this 0.325 fraction feeds.