Expectancy is just average rupees per closed trade
A one-line formula that becomes useful the moment you attach a sample size to it.
Expectancy has an intimidating name and a schoolbook formula: win rate times average win, minus loss rate times average loss.
What it produces is mundane and useful — the average rupees a trade from this filtered set was worth.
Run it on a real filter
Pick a set: one financial year, one product, closed trades only. Compute the four inputs. The answer moves when the filter moves, and that is the point, not a flaw.
| Filter | Trades | Win rate | Avg win | Avg loss | Expectancy |
|---|---|---|---|---|---|
| All trades | 212 | 48% | ₹4,200 | ₹3,400 | ₹247 |
| Index options only | 138 | 52% | ₹4,900 | ₹3,100 | ₹1,060 |
| Stock futures only | 74 | 41% | ₹2,700 | ₹4,000 | −₹1,253 |
One account, one year. The blended number hid both stories. Illustrative journal data, not a live book and not a performance claim.
Pick one side of the fee argument
If average win is gross and average loss is net, you have invented a number that describes nothing. Use net throughout when the question is money, use gross throughout when the question is entry quality, and write the convention on the chart.
Then be rude about sample size
Twelve trades with a fat expectancy is a coin wearing lipstick. Print n. If n is small, hide the trophy and show the count instead.
And the obvious warning: a positive historic expectancy is a description of trades that already closed. It is not permission to increase size.
Early samples flatter. Illustrative journal data, not a live book and not a performance claim.
Key takeaways
- Use one cost convention for the entire formula.
- Show trade count next to every expectancy figure.
- A positive sample is not a size-up instruction.
Not advice, not a call. NiyataBook is a personal trading journal, not a SEBI-registered investment adviser or research analyst. Everything above looks backwards at trades that already closed. What happened in a book does not promise what happens next, and F&O can take a year’s savings in a week.