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Risk

Expectancy — definition & meaning

The average amount you can expect to win or lose per trade.

Expectancy combines win rate and average win/loss into one number: the average profit or loss you can expect per trade over many trades.

Positive expectancy means a strategy makes money on average; negative expectancy means it loses, no matter how exciting individual trades feel. It is the number a serious trader ultimately cares about.

The information on Trding.io is for general information only and is not investment advice. Trading involves a real risk of losing money, and most retail traders lose. Never trade money you cannot afford to lose.

Related terms

Win rate
The percentage of your trades that end in profit.
Risk-reward ratio
How much you stand to gain compared with what you risk on a trade.
Drawdown
The drop from a peak to a trough in your account value.
Leverage
Borrowed exposure that lets you control a large position with a small deposit.
Margin
The deposit a broker holds to keep a leveraged position open.
Free margin
The money in your account still available to open new trades.

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