Formula
| Item | Expression |
|---|---|
| Expectancy per trade (without cashback) | Win rate × average profit (JPY) − loss rate × average loss (JPY) − cost |
| Cost | Spread (pips) × value of 1 pip + round-turn commission (USD) × USD/JPY × lots |
| Break-even win rate | (Average loss + cost − cashback) ÷ (average profit + average loss) |
The value of 1 pip is calculated as 1,000 JPY per lot for JPY crosses and 10 USD per lot for USD pairs.
Why include cost and cashback in expectancy
An expectancy calculated only from win rate and reward-to-risk leaves out spread and commission. Once you subtract the cost you pay on every trade, the expectancy is smaller than the pip calculation suggests.
Cashback comes back on every trade regardless of the result, so it lowers your cost. The more often your method trades, the larger the monthly difference.
How to use the break-even win rate
The break-even win rate is the win rate at which expectancy is 0 under those conditions. If your win rate is not above it, your losses grow the more you trade.
- With an average profit of 10 pips, an average loss of 10 pips and a cost of 1.2 pips, the break-even point is 56%
- If cashback reduces the cost by 0.5 pips, the break-even point falls to about 53.5%
- Win rates swing widely with small samples, so check with a record of 100 trades or more
Points to note
Swap, slippage and spread widening around economic releases are not included. There is no guarantee that past win rates or average results will continue, and this tool does not recommend any particular method or broker.