Expectancy

Average expected profit per trade: (win% × avg win) − (loss% × avg loss), after costs.

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Why it matters

Expectancy tells you whether a strategy can survive long-term.

Trading use: the point is not vocabulary. The point is prediction: what changes when this shows up?

Common trap

Obsessing over win rate while ignoring payoff size and costs.

Example

A 60% win rate can still lose money if losses are larger than wins.

Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.

Notes

Expectancy must include friction: spread, slippage, fees, financing.

If you see this repeatedly, you are in a different regime than your model assumes.
Regime change usually means position size change.
When in doubt: trade smaller, or don’t trade.