Expectancy

Expectancy is the average amount a trader can expect to win or lose per trade over the long run, combining win rate with average win size and average loss size into a single number. A positive expectancy means the strategy is profitable on average, even if any individual trade is a coin flip; a negative expectancy means it will lose money over enough trades no matter how it feels in the short term. Expectancy is typically calculated as (win rate × average win) − (loss rate × average loss), making it one of the clearest single measures of whether a trading system actually has an edge.