Expectancy
Works out what an average trade is worth once wins and losses are weighed. Use it to check an edge is real before scaling it up.
Expectancy is the average outcome of one trade. Take the share you win multiplied by the average win, subtract the share you lose multiplied by the average loss, and what is left is what a typical trade contributes. Positive expectancy means that repeating the process makes money. Negative expectancy means repeating it loses money, and trading more often just gets you there faster.
The two contribution rows show where the number comes from. Win contribution is what the winners bring in per trade on average, loss contribution is what the losers take out. Seeing them side by side makes it obvious which side of the strategy is doing the work. A high win rate with a small win contribution is a strategy that is winning often and not being paid much for it, which is fragile: a small increase in costs or slippage can flip it.
Your recorded expectancy is the same figure computed straight from your logged trades, net profit and loss divided by the number of trades. When it disagrees with the calculated figure, the gap is information. It usually means costs, slippage, or a handful of outsized trades are distorting the averages. A large positive gap driven by one enormous win is not an edge you can rely on repeating.
Expectancy in R restates the answer as a multiple of your average loss. This is the most portable form of the number, because it strips out account size and instrument. An expectancy of 0.2R means a typical trade earns a fifth of what a typical loss costs. Multiply that by the number of trades you take in a month and you have a realistic expectation for the month, which is far more useful than a target picked out of the air.
Trades to the daily target turns the per trade figure into a workload. Your Staircase daily target, the target per contract multiplied by the contracts your capital supports, divided by the expectancy of one trade, is roughly how many trades a typical day needs. It is the most sobering row here. An edge of a few units against a target of a few hundred means a day of constant activity, and every one of those trades pays commission, which the commission impact card will then take a bite out of. If the number is uncomfortably high, the target is ambitious for the edge, and raising the edge is the honest fix rather than raising the size.
One caution: expectancy says nothing about the path. A positive expectancy strategy still delivers losing weeks and losing months. It tells you the direction of the average, not the smoothness of the ride, and the ride is what the risk of ruin and drawdown recovery cards are for.