Average Trade Value / Expectancy

The expectancy is best used as a long-term metric and it says how much, on average, each trade is worth.

You find the Expectancy (Average Trade Value) in multiple places in your Edgewonk trading journal:

• In the Home Tab in the Overall Evaluation box
• The Trade Analytics features a column called Expectancy. You can apply the different ordering criteria to the Trade Analytics to analyze the average trade value for different components of your trading strategy and approach.
• Underneath the Equity Graph, Edgewonk shows the Expectancy (Average Trade)
• Under Reports > Monthly Reports, the Avg Trade is included as a separate column.

Some tips on interpreting the Expectancy:

Let’s say you made 100 trades and won $5,000 over those 100 trades. The expectancy, in that case, is $50 ($ 5,000 / 100). This means that each trade is worth $50 over the long-term.

How to use it in your trading: The expectancy, for one, is a confidence builder. If you see that your system has a positive expectancy, it tells you that, all things being equal, you have a high likelihood of coming out ahead even though you might experience losing streaks and drawdowns.

Identifying parts of your trading where your expectancy is negative can be helpful to find ways to improve your overall performance. By leveraging the tagging function in Edgewonk, you can identify parts of your trading, specific setups, or situations, where your expectancy is negative or low. Then, you can either eliminate those or work on them targeted.