Give risk a common unit
Let one R represent the assumed average gross loss on a losing trade. A 2R average gross win is twice that amount. Actual trades will not all match the averages.
Weight both outcomes
With a 40% win rate and a 2R average gross win, gross expectancy is 0.40 × 2R − 0.60 × 1R = 0.20R per trade.
Subtract the friction
If average cost is 0.10R per trade, net expectancy falls to 0.10R. The cost-adjusted break-even win rate is (1 + 0.10) ÷ (1 + 2), or 36.67%.
Treat estimates as uncertain
The calculator assumes constant probabilities and average payoffs. A positive estimate cannot guarantee future profit, prevent losing streaks or account for changing market conditions. Do not subtract costs again if your journal’s wins and losses are already net.
Sources & further reading
Sources checked 13 November 2026. These organisations provide reference material and do not endorse this website.
