THE EXPECTANCY OF YOUR TRADING STRATEGY

HOW TO CALCULATE THE EXPECTANCY OF YOUR TRADING STRATEGY

Now that you know what an R-multiple is, we can get back to calculating your expectancy. I know you may not have a system just yet, but don’t worry; just keep this formula in mind as something to come back to down the track.

To calculate your expectancy, first, you add up the total R-value of your Forex trades, and then you divide this total by the number of trades you have made.

Here is the formula:

(total R) / (number of trades) = expectancy

For example:

If you had placed 30 trades and earned 45R in the process, your equation would look like this:

45R /30 = 1.5

In this case, your system has an expectancy of 1.5R (which is very good).