Expected trade value: Combining Win Probability, Payoffs and Costs
Expected trade value weights the average win and loss by their probabilities and subtracts costs. It summarizes the assumptions in cash per trade.
Use the Expected trade value Calculator to enter your own figures and compare the result with the worked example below.
Expected trade value formula
EV = (Win probability×Average win) − (Loss probability×Average loss) − Costs
Worked example
| Item | Example value |
|---|---|
| Win probability | 50 % |
| Average win | 200 USD |
| Average loss | 100 USD |
| Costs per trade | 5 USD |
| Expected trade value | 45 USD |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
A positive estimate can disappear with small input errors. Historical win rates and payoffs may not persist in a new market regime.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Leveraged investing risks. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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