See how your trading account could grow over time based on your win rate, risk-to-reward ratio, and position sizing. This calculator projects expected returns using compound growth, where profits are reinvested to accelerate gains. Understand the math behind consistent profitability.
Understanding Trading Expectancy
Expectancy is the average amount you expect to win (or lose) per trade, expressed in multiples of your risk (R).
Expectancy Formula:
Expectancy (R) = (Win Rate × Average Win in R) − (Loss Rate × Average Loss in R)
This means on average, you gain 0.5R for every trade. If you risk $100, you expect to make $50 per trade over time.
The Power of Compound Growth
Compound growth means your profits earn additional profits. Instead of withdrawing gains, you risk a percentage of your growing balance.
Simple vs. Compound Growth:
Starting Balance: $10,000
Risk per trade: 2%
Expectancy: 0.3R (≈ 0.6% per trade)
Trades: 100
Method
Final Balance
Total Gain
Simple (fixed $200 risk)
$16,000
+60%
Compound (2% of balance)
$18,194
+82%
The difference becomes dramatic over more trades.
After 500 trades with the same parameters:
Simple: $40,000 (+300%)
Compound: $148,024 (+1,380%)
Key Metrics Explained
Win Rate
The percentage of trades that reach your take-profit. A 50% win rate means half your trades win. Higher isn’t always better — what matters is the combination of win rate AND risk:reward.
Risk:Reward Ratio
How much you gain on winners relative to what you lose on losers. A 1:2 ratio means winning trades earn twice what losing trades cost.
Expectancy (R)
Your average return per trade in terms of risk units. Positive expectancy means profitable over time; negative expectancy means losing.
Profit Factor
Total gross profit divided by total gross loss. Values above 1.0 are profitable. Professional traders often target 1.5–2.0.
Both win rate and R:R affect expectancy. Here’s how different combinations perform:
Win Rate
R:R
Expectancy (R)
Profitable?
30%
1:3
+0.20
✓ Yes
40%
1:2
+0.20
✓ Yes
50%
1:1.5
+0.25
✓ Yes
60%
1:1
+0.20
✓ Yes
70%
1:0.5
-0.15
✗ No
40%
1:1
-0.20
✗ No
Key insight: You can be profitable with a low win rate if your R:R is high enough. Trend-following strategies often win only 30–40% of trades but remain profitable through large winners.
Realistic Expectations
This calculator shows expected (average) outcomes. Real trading involves variance — lucky and unlucky streaks.
What to expect:
Individual months or quarters may differ significantly from projections
Drawdowns are normal even with positive expectancy
The projection is most accurate over large numbers of trades (100+)
Red flags in your projections:
Doubling your account in under 50 trades with conservative risk
Requiring 80%+ win rate to be profitable
Negative expectancy at any realistic win rate
Rule of thumb: If your strategy doubles your account in under 100 trades with 2% risk, either your expectancy is exceptional or your estimates are optimistic.
Using This Calculator Effectively
Use Historical Data
Don’t guess your win rate. Calculate it from at least 30–50 real trades. Your actual win rate is often lower than you think.
Be Conservative
Use slightly worse numbers than your backtesting shows. Real trading involves slippage, missed entries, and emotional errors.
Account for Drawdowns
A positive expectancy strategy still experiences losing streaks. The calculator shows average outcomes, not worst-case scenarios.
Consider Trading Frequency
High expectancy means nothing if you only take two trades per month. Total returns = Expectancy × Number of Trades.
Break-Even Requirements
Knowing the minimum win rate for profitability helps evaluate whether a strategy is viable:
Break-Even Win Rate = 1 ÷ (1 + R:R)
Risk:Reward
Break-Even Win Rate
1:0.5
66.7%
1:1
50.0%
1:1.5
40.0%
1:2
33.3%
1:3
25.0%
If your R:R is 1:2, you only need to win 34% of trades to be profitable.
Any win rate above this produces positive expectancy.
Related Trading Calculators
The compound growth model only tells part of the story. Use these tools (or explore all trading calculators) to stress-test every variable in your trading plan.
It projects how your trading account may grow over time using your win rate, risk per trade, and risk to reward ratio. It also shows expectancy and profit factor.
What is trading expectancy?+
Expectancy is the average amount you expect to gain or lose per trade. If expectancy is positive, the strategy is profitable over many trades. If it is negative, the strategy loses money over time.
How is expectancy calculated?+
Expectancy uses your win rate and risk to reward ratio. For example, with a fifty percent win rate and a one to two ratio, expectancy is positive because wins are larger than losses.
How does compound growth work in trading?+
Compound growth increases your position size as your account grows because you risk a fixed percentage of the balance. Gains build on previous gains, which speeds up growth over time.
Why is compound growth stronger than simple growth?+
Simple growth uses the same dollar risk every trade. Compound growth increases the dollar risk as your account grows, which creates a larger snowball effect as trade count increases.
How accurate are the projections from this calculator?+
They show average outcomes. Real trading can be above or below the projection due to streaks, slippage, spread and missed entries. Accuracy improves as you complete more trades.
What win rate is needed to be profitable?+
The win rate needed depends on your risk to reward ratio. For example, with a one to two ratio, you only need to win thirty three percent of trades to be profitable. The calculator shows this break even number for each scenario.
How does risk per trade affect account growth?+
Higher risk speeds up growth when you win but increases drawdowns and the chance of ruin. Lower risk slows growth but offers greater stability. Many traders use one to two percent risk per trade.
Should I change risk when my account goes through a losing streak?+
Most traders keep risk as a percentage of balance so the position size naturally adjusts downward during drawdowns. This helps protect the account until results improve again.
Why is my real account not matching the projection?+
Common reasons include overestimated win rate, lower real risk to reward ratio, execution issues such as slippage, emotional trading errors, or too few trades to reflect true averages.
How many trades do I need for reliable stats?+
At least thirty to fifty trades for a rough estimate of win rate, and one hundred or more trades for a reliable expectancy number. The larger the sample, the better the accuracy.
Can this calculator help me compare two strategies?+
Yes. You can enter different win rates and risk to reward profiles for each strategy. The calculator shows which strategy has higher expectancy and stronger long term growth.
How does trading frequency affect results?+
Growth comes from expectancy multiplied by the number of trades. A strong strategy with low trade frequency grows slowly. A mild strategy with high frequency can still compound well if expectancy is positive.
Should I always aim for very high R:R ratios?+
No. Extremely large risk to reward targets often fail to reach the take profit level. A realistic ratio that the market regularly delivers is better than an oversized target that price never reaches.
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