Trading Expectancy & Risk-of-Ruin Calculator
Does your strategy actually have an edge? Enter your win rate and average win and loss to get your expectancy per trade — in dollars and R-multiples — plus your win/loss ratio and an honest risk-of-ruin signal based on how much you risk per trade.
Enter your average win and average loss in the same unit. Use R-multiples (multiples of the amount you risk per trade) to keep it account-size-independent, or switch to currency for real figures.
Expectancy per trade
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How to use the calculator
- Choose R-multiples (multiples of what you risk per trade) or a currency.
- Enter your win rate — the percentage of trades that finish as winners.
- Enter your average win and average loss in the same unit (both in R, or both in your currency).
- Set your risk per trade to see the risk-of-ruin signal. Read your expectancy, R-multiple and win/loss ratio on the right.
Expectancy decides whether you make money
Expectancy is the single most honest measure of a trading strategy. It combines how often you win with how much you win versus lose into one figure: the average result you can expect per trade. The formula is (win rate × average win) − (loss rate × average loss). If it's positive, more trades put money in your account than take it out. If it's negative, no amount of position sizing or discipline can save the system — you're paying to play. Measuring in R-multiples — where 1R is the amount you risk per trade — makes the number independent of account size, so a 0.4R expectancy means the same thing whether you trade a €2,000 account or a €2,000,000 one.
Risk of ruin is the other side of the coin. Even a genuine edge can wipe out an account if you bet too much on each trade, because a normal losing streak can compound faster than your edge recovers. That's why the risk-of-ruin signal here weighs your edge against your risk per trade. We keep it qualitative on purpose: a precise ruin probability requires assumptions — fixed-fractional sizing, a stable edge, independent outcomes — that markets routinely break, so a false-precision percentage would mislead more than it helps. The practical takeaway is timeless: build a positive expectancy first, then risk a small, fixed fraction per trade so a bad run is survivable.
Frequently asked questions
How do you calculate trading expectancy?
Expectancy per trade = (win rate × average win) − (loss rate × average loss), where loss rate is 1 − win rate. It tells you the average amount you can expect to make or lose per trade over a large sample. A positive number means the system makes money over time; a negative number means it loses. Enter your figures in R-multiples to keep it account-independent, or in currency for real dollar amounts.
What is a good expectancy?
Any positive expectancy is an edge, but bigger is more durable. As a rough guide, an expectancy above roughly 0.2R–0.3R per trade is solid for most discretionary strategies once costs are included. What matters more is that the number stays positive after spreads, commissions and slippage — and that you have enough trades for the edge to show up.
What is risk of ruin in trading?
Risk of ruin is the probability of losing so much of your account that you can no longer trade. It rises with bet size (risk per trade) and falls with the size of your edge. If your expectancy is zero or negative, ruin is effectively certain over enough trades no matter how small you bet. If it is positive, betting small keeps ruin unlikely — which is why professionals risk only a fraction of the account per trade.
Why does a high win rate not guarantee profit?
Because expectancy depends on both how often you win and how much you win versus lose. A 70% win rate sounds great, but if your average loss is bigger than your average win, expectancy can still be negative — a few large losers wipe out many small winners. Conversely, a 40% win rate with winners three times the size of losers is highly profitable. Always look at win rate and win/loss ratio together.
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Educational tool only — not financial advice. Expectancy and risk-of-ruin figures are estimates based on the numbers you enter and simplifying assumptions. Trading involves substantial risk of loss. Also see our trading blog.