Strong positive edge. This system should grow your account over time.
How to Use This Calculator
Enter your starting balance and set your risk per trade percentage. Most disciplined traders use 1–2% risk per trade to protect against drawdowns.
Set your win rate — the percentage of trades that reach your take-profit. Use historical data from at least 30–50 real trades. Your actual win rate is often lower than you expect.
Enter your risk:reward ratio — how much you gain on winners relative to what you lose on losers. A 1:2 ratio means winning trades earn twice what losing trades cost.
Set the number of trades and your trading frequency to project a timeline. The calculator shows how your account compounds over time using these inputs.
Understanding Trading Expectancy
Expectancy is the average amount you expect to gain or lose per trade, expressed in multiples of your risk (R).
50% win rate, 1:2 R:R → Expectancy = (0.50 × 2) − (0.50 × 1) = +0.5R. If you risk $200, you expect to gain $100 per trade on average.
| Win Rate | R:R | Expectancy | Profitable |
|---|---|---|---|
| 30% | 1:3 | +0.20R | Yes |
| 40% | 1:2 | +0.20R | Yes |
| 50% | 1:1.5 | +0.25R | Yes |
| 60% | 1:1 | +0.20R | Yes |
| 70% | 1:0.5 | −0.15R | No |
| 40% | 1:1 | −0.20R | No |
You can be profitable with a low win rate if your R:R is high enough. Trend-following strategies often win 30–40% of trades but remain profitable through large winners.
Simple vs Compound Growth
Compound growth means profits are reinvested — you risk a fixed percentage of your growing balance, not a fixed dollar amount.
| Method | Final Balance | Total Gain |
|---|---|---|
| Simple (fixed $200 risk) | $16,000 | +60% |
| Compound (2% of balance) | $18,194 | +82% |
After 500 trades the difference becomes extreme — simple: $40,000 (+300%), compound: $148,024 (+1,380%).
Break-Even Win Rate by R:R
| R:R | Break-Even Win Rate |
|---|---|
| 1:0.5 | 66.7% |
| 1:1 | 50.0% |
| 1:1.5 | 40.0% |
| 1:2 | 33.3% |
| 1:3 | 25.0% |
Using This Calculator Effectively
Use historical data. Don't guess your win rate. Calculate it from at least 30–50 real trades in your journal. Your actual win rate is often lower than backtesting suggests.
Be conservative. Use slightly worse numbers than your backtest shows. Real trading involves slippage, missed entries, and emotional errors that reduce performance.
Account for drawdowns. A positive expectancy strategy still experiences losing streaks. The projection shows average outcomes — worst-case periods will look worse.
Consider trading frequency. High expectancy means nothing with low trade frequency. Total returns = Expectancy × Number of Trades. A mild strategy taken often can outperform a great strategy taken rarely.