Expectancy: does your method actually work?
After this lesson you can calculate expectancy in R from your own trades, explain why fewer than 30 trades prove very little, and use Chart Replay to test a method before real money.
Expectancy: kya aapka tareeqa waqai kaam karta hai?
Expectancy batati hai ke aap har trade par average kitna kamate hain, R mein. Formula: E = (win% x average win) - (loss% x average loss). Sirf win rate kuch nahi batata: 70% jeet ke saath bhi agar wins chhote aur losses bade hon to nuqsan hota hai. Misal: 30 trades, 12 jeet average +1.8R, 18 haar average -1R. E = 0.72 - 0.60 = +0.12R per trade.
Chhota sample dhoka deta hai. Pehli 10 trades mein 7 jeet se E +0.96R lagta tha, jo asal se aath guna zyada tha. Kam az kam 30 trades ek hi rules ke saath karein, aur har qualifying setup gin lein. Chart Replay par practice karein: rule likhein, stop aur 2R target ke saath trades lein, aur har nateeja R mein journal mein likhein. Agar E zero ya kam ho to size barhane ke bajaye ruk jayein.
- E = (win% x avg win) - (loss% x avg loss), hamesha R mein.
- Zyada win rate bhi nuqsan de sakta hai agar wins chhote hon.
- 30 se kam trades par apne tareeqe ka faisla na karein.
Poora sabaq neeche English mein hai. Quiz English mein hai; asaan alfaaz mein.
Zainab, a data-entry operator in Quetta, won 7 of her first 10 practice trades and felt ready to go big with real money. A cousin who trades asked her one question: 'What is your expectancy?' She did not know. Over the next 20 trades she won only 5. Her early 70% win rate had been luck in a small sample. Zainab was not a bad trader. She simply had no way to measure whether her method had an edge, so she was judging it by how she felt about the last few results.
The expectancy formula
Expectancy tells you what you earn on average per trade, measured in R, your planned risk per trade. The formula is E = (win% x average win) - (loss% x average loss), with wins and losses in R. If E stays above zero over enough trades, your method has an edge. If it is zero or below, more trades will not save it; they will only lose money faster or slower.
Win rate alone means little. A 70% win rate with average wins of 0.3R and losses of 1R gives E = 0.7 x 0.3 - 0.3 x 1 = -0.09R: losing money while winning most trades. A 35% win rate with 2.5R wins and 1R losses gives E = 0.35 x 2.5 - 0.65 x 1 = +0.225R. The break-even win rate for an average win of W R is 1 / (1 + W).
Why you need 30 or more trades
Small samples lie. In 10 trades, one extra win moves your win rate by 10 points; in 30 trades, by about 3.3 points. With wins of 1.8R and losses of 1R, each 10-point change in win rate moves E by 0.28R, which is enough to make a weak method look excellent on luck alone.
Treat 30 trades as the minimum before judging a method, and 50 to 100 before trusting it with meaningful money. Keep the rules identical across the sample; if you change the setup halfway, the count restarts. Expect losing streaks even with an edge: with a 40% win rate, a run of 7 or more losses somewhere in 100 trades is more likely than not.
Testing with Chart Replay
Chart Replay hides the future bars, lets you place spot-only practice trades with a stop and a target, and then gives you a scored report. Treat it like a laboratory, not a game: the goal is not to win the session but to collect honest data about one set of rules, trade after trade, until the sample is large enough to mean something.
- Write the setup rules first, exactly as they appear in your plan.
- Pick one market and one timeframe, for example BTC daily.
- Take every setup that appears, not only the ones you like.
- Record each result in R in your journal.
- After 30 trades, calculate E, win rate, average win, average loss and the longest losing streak.
Zainab's 30 trades
After 30 Chart Replay trades, Zainab has 12 wins averaging +1.8R and 18 losses averaging -1R. Win rate 40%, loss rate 60%. E = (0.40 x 1.8) - (0.60 x 1) = 0.72 - 0.60 = +0.12R per trade. The break-even win rate for 1.8R winners is 1 / 2.8 = about 35.7%, so her edge is thin but positive.
Fees and slippage cost her about 0.04R per trade, so her net E is about +0.08R. With 1R = Rs 3,000, that is about Rs 240 per trade on average, or about Rs 24,000 over 100 trades, with losing streaks along the way.
Her first 10 trades (7 wins) gave E = (0.70 x 1.8) - (0.30 x 1) = 1.26 - 0.30 = +0.96R, eight times the figure the full sample showed.
Measuring your results truthfully is part of tying the camel before relying on Allah (Jami at-Tirmidhi 2517): you do not risk your family's money on a method you have never tested. It also marks a line between trade and gambling. A gambler relies on luck and hopes the next bet wins; a trader who knows the expectancy of a tested, spot-only method is taking a measured business risk on real assets, within the trade Allah has permitted (Quran 2:275). If the numbers show no edge, the halal response is to stop, not to bet bigger.
Education, not a fatwa. Where scholars differ, we say so. See what scholars say.
The trap is judging a method after 5 or 10 trades, in either direction. Early wins push people to raise their size just before the sample turns; early losses make them abandon a method that works. The second trap is cherry-picking: logging only the setups you 'would have taken'. Your expectancy is real only if every qualifying setup is counted.
Open Chart Replay on the BTC daily chart. Write one setup rule, then take the next 10 qualifying setups with a stop and a 2R target. Record each result in R and calculate E with the formula. Continue in later sessions until you reach 30 trades before drawing any conclusion about the method.
Start Chart Replay →Key takeaways
- Expectancy, E = (win% x average win) - (loss% x average loss) in R, tells you whether a method has an edge.
- A high win rate can still lose money, because the size of wins versus losses matters as much.
- Judge a method only after 30 or more identical trades, and count every qualifying setup.
Check yourself
Pass with 2 of 3 to complete the lesson. Answers are checked on our server, so the certificate means something.
Barqish is an educational platform. Nothing here is financial advice or an instruction to buy or sell, and screening is not a fatwa. Spot ownership only: no leverage, no short selling. Updated 30 September 2026.