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If you made 10 trades, six of which were winning trades and four of which were losing trades, your percentage win ratio would be 6/10 or 60%. If your six trades made $2,400, then your average win would be$2,400/6 = $400. If your losses were$1,200, then your average loss would be $1,200/4 =$300. Apply these results to the formula and you get E= [1+ (400/300)] x 0.6 – 1 = 0.40, or 40%. A positive 40% expectancy means your system will return you 40 cents per dollar over the long term, if you keep your risk equivalent to 1% of your account on every trade.