Trading expectancy in R: why win rate alone tells you almost nothing
Win rate on its own says almost nothing about whether a method makes money. How to calculate expectancy in R net of costs, the breakeven win rate for any target, why 70% can lose and 35% can win, and why 20 trades tell you very little.
Plays from YouTube once you press play (nothing loads before that). Captions included · watch on YouTube
In this video
- 0:00 Intro
- 0:28 Expectancy in R
- 0:54 Breakeven win rate
- 1:16 Win rate vs edge
- 1:47 Small samples
- 2:10 Costs and slippage
- 2:32 From your journal
- 2:54 Free calculator
Key points
- Expectancy = win% x average win - loss% x average loss, all in R and net of costs.
- Breakeven win rate = (1 + cost in R) / (target in R + 1); small targets need very high win rates.
- A 70% win rate can lose and a 35% win rate can win: the size of wins and losses decides.
- 20 trades leave a very wide error band; treat expectancy as provisional until you have 100 or more.
- Include every trade under one fixed rule set; changing rules mid-sample starts a new sample.
Examples use round, illustrative numbers and are not actual trades or results. Education only — not investment, tax or legal advice. Narration uses two AI-generated voices.
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