The Probability-of-Profit Trap
Probability Versus Expectancy Calculator
Reviewed 2026-07-31

Formula:
Expected value = probability x average gain - failure probability x average loss - transaction costs.

Checklist:
- Compare probability with average loss size.
- Check maximum loss, not only average loss.
- Include transaction costs.
- Avoid treating a percentage as a full trade thesis.

Educational use only. Options involve risk and results depend on your assumptions.