Commission, spread, and expectancy in one formula
Posted: Thu Oct 29, 2026 10:32 am
Expectancy is the average amount earned per trade, and it is the single best summary of a strategy. For a scalper, the formula needs to include costs honestly.
Write it as: win rate times average win, minus loss rate times average loss, minus cost per trade. All values in the same unit, such as pips.
Suppose the win rate is sixty percent, the average win is three pips, the average loss is three pips, and the cost per trade is one pip. The calculation is 0.6 times 3, which is 1.8, minus 0.4 times 3, which is 1.2, minus 1. The result is negative 0.4 pips. A strategy that looks profitable on gross numbers loses money.
This kind of calculation is easy to automate in a spreadsheet. Updating it weekly with real trade data gives a running view of whether the edge is real.
It also reveals which levers matter most. Raising the win rate by two points, cutting cost by half a pip, or increasing the average win by a quarter pip all show up directly.
What is your current expectancy per trade after costs, and which lever would help the most?
Write it as: win rate times average win, minus loss rate times average loss, minus cost per trade. All values in the same unit, such as pips.
Suppose the win rate is sixty percent, the average win is three pips, the average loss is three pips, and the cost per trade is one pip. The calculation is 0.6 times 3, which is 1.8, minus 0.4 times 3, which is 1.2, minus 1. The result is negative 0.4 pips. A strategy that looks profitable on gross numbers loses money.
This kind of calculation is easy to automate in a spreadsheet. Updating it weekly with real trade data gives a running view of whether the edge is real.
It also reveals which levers matter most. Raising the win rate by two points, cutting cost by half a pip, or increasing the average win by a quarter pip all show up directly.
What is your current expectancy per trade after costs, and which lever would help the most?