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In plain English
Winning more often does not always mean making money. The size of your wins, losses and fees matters too.
- CAD 10,500
35 wins of CAD 300.
- − CAD 6,500
65 losses of CAD 100.
- CAD 3,500 net
After subtracting CAD 500 in fees.
The precise meaning
How often you win matters, but so does how much you win or lose. Fees can turn an apparent gain into a loss.
In this guide: contents & sources
Win rate tells you what share of trades are wins. The average win compared with the average loss tells you how big those wins are. You need both: many small wins can be outweighed by fewer large losses.
Here, you can try different win rates, win and loss amounts, and costs in CAD. The result is the average profit or loss those numbers imply, called expectancy. These are example assumptions, not measured chances of winning or advice on where to buy, set a stop or sell.
Start by saying which number comes first
Risk-reward notation can be confusing without labels. Here, reward/risk means average gross win divided by average gross loss. CAD 300 ÷ CAD 100 = 3. The average win is three times the average loss; expressed as risk:reward, that is 1:3.
A planned target-to-stop ratio is a different input from an observed average payoff. Trades can finish at other values. For this experiment, enter the average amounts you want to examine and keep fees separate. Entering 3 as a ratio does not establish that a method will deliver it.
Thirty-five wins can outweigh sixty-five losses
Take an example of 100 trades: 35 wins averaging CAD 300, 65 losses averaging CAD 100 and CAD 5 charged on every trade. These are invented numbers, not a trading record.
The wins add CAD 10,500 and the losses subtract CAD 6,500. Fees take another CAD 500, leaving CAD 3,500 in total, or CAD 35 per trade. If you use 35% as an assumed future chance of winning, CAD 35 is the average result implied by that assumption. It does not promise what the next set of trades will earn.
| Contribution | Calculation | CAD amount |
|---|---|---|
| Gross wins | 35 × 300 | +10,500 |
| Gross losses | 65 × 100 | -6,500 |
| Costs on every outcome | 100 × 5 | -500 |
| Illustrative batch total | 10,500 − 6,500 − 500 | +3,500 |
| Average per outcome | 3,500 ÷ 100 | +35 |
Work out the average profit or loss after fees
CME's mathematical-expectation lesson combines win frequency with average win size and loss frequency with average loss size. Our extension subtracts an entered fixed cost: expectancy = p × average win − (1 − p) × average loss − cost, where p is the win probability expressed as a decimal.
Substituting our example gives 0.35 × CAD 300 − 0.65 × CAD 100 − CAD 5 = CAD 35. Dividing by the CAD 100 average gross loss gives 0.35R. Here R is that loss amount, not a percentage return on an account.
Fees apply whether you win or lose. A win leaves CAD 295; a loss costs CAD 105. If your recorded averages already include fees, subtracting those fees again would count them twice.
What win rate would cover these losses and fees?
Set expectancy to zero and rearrange: break-even win probability = (average loss + cost) ÷ (average win + average loss). With CAD 300 wins, CAD 100 losses and CAD 5 costs, the result is 105 ÷ 400 = 26.25%.
For these amounts, the calculation turns positive only above 26.25% wins. That does not tell you whether you can achieve that win rate. With no fees, the same calculation breaks even at 25%.
Explore a whole set of combinations
Enter 35% wins, CAD 300 average win, CAD 100 average loss and CAD 5 cost to reproduce the worked example. The matrix varies win probability and the gross win/loss ratio while keeping your entered loss and cost fixed.
Compare a 50% win rate at a 1:1 payoff with an 80% win rate at a 0.5:1 payoff. With CAD 100 losses and CAD 5 costs, their expectancies are CAD -5 and CAD 15 respectively. Neither cell tells you which combination is attainable.
Change the win rate and the payoff
Try the assumptions0.35R per outcome using the entered average gross loss as 1R. The assumed mix breaks even at 26.25% wins.
The win rate you enter is an assumption, not proof that you can make money. Each table cell keeps your average loss and fee unchanged. Select a cell to try its win rate and win size.
Net expectancy matrix in CAD per outcome
| Win rate | 0.5:1 payoff | 1:1 payoff | 1.5:1 payoff | 2:1 payoff | 3:1 payoff |
|---|---|---|---|---|---|
| 20% | |||||
| 35% | |||||
| 50% | |||||
| 65% | |||||
| 80% |
A recorded win rate is not a future probability
Seven wins out of 20 trades give a recorded win rate of 35%. That count alone does not establish a 35% chance of winning the next trade. The calculator uses the rate you enter as an assumption. It does not check how reliable your trading record is or calculate a confidence interval.
This calculator divides trades into wins and losses. Real records can include trades that break even and fees that differ from trade to trade. Decide how to count those trades before entering your averages. Leaving them out changes what the result describes.
An average cannot show the order of events
The same 35 wins and 65 losses can happen in many orders. A run of losses can leave your account in a very different position along the way than alternating wins and losses, even when the final total is the same. This tool does not simulate that order or calculate drawdown.
Averages also conceal variation within each group. Ten CAD 100 losses and nine CAD 50 losses plus one CAD 550 loss share the same average. Changing stakes, unusually large losses and compounding require information that this two-average model does not contain.
A few loose ends
Common questions
Can a high win rate still lose money?
Yes. At 80% wins averaging CAD 20, losses averaging CAD 100 and CAD 5 cost per outcome, expectancy is 0.8 × 20 − 0.2 × 100 − 5 = CAD -9.
Does positive expectancy guarantee a profitable run?
No. The average comes from the win rate and amounts you enter. It cannot tell you which trades will win or the order of the losses. Choosing numbers that give a profit does not show that you can achieve those results.
Is this the same as position sizing?
No. Position sizing works out how much to buy using your available money, planned loss and stop price. This calculator compares how often trades win and how much each win or loss is worth.
Check the original
Sources & checks
Reviewed October 1, 2026. Sources support the definitions and model context. Numerical examples are hypothetical and do not predict market outcomes.