Enter the wins and losses from a backtest or your journal. You get the profit factor, what an average trade is worth, your win rate and the win rate you need to break even.
How it works
Profit factor. Money made on winners divided by money lost on losers. Above 1 the trades make money, below 1 they lose it. Fees come off every trade first.
Expectancy. The total result divided by the number of trades: what an average trade is worth. It is the number to compare with your risk per trade.
Sample size. These numbers settle slowly. With 30 trades a good result can easily be luck, so treat them as a first look until you have a few hundred trades taken the same way.
Example
100 trades: 45 wins averaging $300 and 55 losses averaging $200, with $10 of fees a trade. Wins bring in $13,050 and losses cost $11,550, so the profit factor is 1.13, the total is $1,500 and an average trade is worth $15.00. Those trades break even at a 42% win rate.
Questions
What is a good profit factor?
Above 1 makes money, but there is no official line. Many traders look for 1.3 to 2 after costs over a large sample. Very high numbers on few trades usually mean luck or a test that was fitted to the past.
How do I calculate profit factor?
Add up what your winning trades made and divide by what your losing trades lost, both after costs. $13,050 won and $11,550 lost is a profit factor of 1.13.
What is the difference between profit factor and expectancy?
Profit factor is a ratio and has no size. Expectancy is in dollars or R per trade, so it shows what a trade is worth. A strategy can have a high profit factor and still trade too rarely to matter.
How many trades do I need?
More than most people expect. With 100 trades at a 50% win rate, the true win rate could be about 10 points either way. A few hundred trades give a much clearer answer.
Where can I get these numbers?
From your journal or a backtest. ChartTrainer's backtester and journal both show them, so you can check a strategy before you trade it.