Glossary

Expectancy

The average amount an account makes or loses per trade, combining win rate and payoff.

Expectancy is win rate times average win, minus loss rate times average loss. It answers the question profit factor cannot: what does one more trade, on average, add to the account?

A positive expectancy is necessary for a strategy to be worth copying over time, but it says nothing about the size of the worst trade or how the record was built, which is why it sits beside the drawdown and concentration checks, not in place of them.