Positive Expectancy Explained: Does Your Strategy Work?
What if the strategy you've been trading for six months has a negative edge — and you have no idea?
Most traders can't answer one simple question: does your strategy actually make money over time? Not "does it feel profitable." Not "did it work last week." Does the math confirm a statistical advantage?
If you can't answer that with a number, you're not trading. You're gambling with extra steps.
What Is Positive Expectancy?
Positive expectancy means that over a large enough sample of trades, your strategy produces a net profit. Simple concept. Shockingly few traders actually verify it.
The formula is straightforward:
Expectancy = (Win Rate × Avg Win) – (Loss Rate × Avg Loss)
If that number is positive, you have an edge. If it's negative, you're bleeding money no matter how good your risk management is. You can't risk-manage your way out of a losing strategy.
At HTA, we don't let anyone trade a strategy live until they've confirmed positive expectancy across at least 100 trades i...