What expectancy aims to calculate or to track is to calculate, what is the average return of each trade that you do after you’ve completed a series of trades? And try to use this to project forward. If, let’s say, you continue to apply this particular strategy and you continue to generate this kind of R-Multiple profile over the next 10 trades or the next 100 trades if you generally is able to hit this kind of R-Multiple profile, it will generally means that on average, every trade over the long run will generate you 0.5R returns.
But of course, on a trade to trade basis you would still have some positive R, some negative R, but over the long run, each trade would generate you about 0.5R. That’s why we call it expectancy because it’s what you expect that each trade going from here over the long lush number over a lush number of trades. Each trade, how much is it going to generate for you? That’s why we call it expectancy.
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