Expectancy per trade after all costs is the only number that matters

[Amanhasnoname]

Win rate, profit factor, and drawdown all matter, but the expected value per trade after costs summarises the edge.

The calculation is simple. Multiply the average win by the win rate, subtract the average loss times the loss rate, then subtract average costs per trade. If the number is positive, there is an edge, and if it is zero or negative, there is not.

For scalpers, costs are a large share of the gross figure. An average win of 3 pips, an average loss of 3 pips, a 55 percent win rate, and costs of 0.8 pips per trade yields an expectancy of roughly 0.15 minus 0.8, which is negative. The strategy loses despite the high win rate.

Seeing the number clarifies what has to change. Reducing costs, improving the win rate, or increasing the reward-to-risk ratio each shifts the figure by a calculable amount.

Tracking expectancy over rolling windows also shows whether the edge is stable or fading.

What is the measured expectancy per trade after costs, and how has it shifted over time?