7 min read
Break-even win rate and expectancy, explained simply
Why a 40% win rate can still be fine — and how costs quietly raise the bar.
By TradaxLab
Break-even is not the goal
At 2:1 reward-to-risk you only need about 33% wins to break even before costs. Expectancy asks whether your real win rate clears that bar with room to spare.
Use Break-even and Expectancy together, then Trade costs to see how spread and commission eat R.
Sample size reality check
A hot 20-trade streak proves almost nothing. Expectancy’s sample-size hint exists so you don’t resize your whole account on noise.
Expectancy worksheet (quick math)
Expectancy = (win rate × average win in R) − (loss rate × average loss in R).
Then subtract average cost per trade in R to get net expectancy.
If net expectancy is near zero, improve process before increasing size.