Published on *SelfGrowth.com* (http://www.selfgrowth.com)

By *Johhny Fortune*

On *October 31, 2019*

There are no golden tips or holy grail. There are no hacks or cheat sheats. There are countless strategies to choose from depending on your trading style and many wise practices to follow. They are enormous and can’t fit in a global internet answer. Google search is the best option if you want to find them.

But let me try to teach you about global forex trading

Anyway, I will give you a small tip regarding calculating expectancy:

Expectancy is the formula you use to determine how reliable your system is. You should go back in time and measure all your trades that were winners versus losers. Then determine how profitable your winning trades were versus how much your losing trades lost.

Take a look at your last 10 trades. If you haven't made actual trades yet, go back on your chart to where your system would have indicated that you should enter and exit a trade. Determine if you would have made a profit or a loss. Write these results down. Total all your winning trades and divide the answer by the number of winning trades you made. Here is the formula:

**E= [1+ (W/L)] x P – 1**

where:

W = Average Winning Trade

L = Average Losing Trade

P = Percentage Win Ratio

Example:

If you made 10 trades and six of them were winning trades and four 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 that your system will return you 40 cents per dollar over the long term.

If you curious about Forex in Australia, check it out.

Author's Bio:

Johnny Fortune is an expert in investing and money management. Always looking for the next big thing in learning and knowledge.