Expected value is the average profit or loss of a trade over many repetitions: EV = probability of winning × reward − probability of losing × risk. A strategy with positive EV makes money over time even if it loses individual trades. It is the single metric that determines long-run profitability, which is why a low win rate can still be highly profitable with a large enough reward-to-risk.
This term belongs to Risk & statistics. See how it fits the bigger picture in The Money, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
FAQ
What is Expected value (EV)?
Expected value is the average profit or loss of a trade over many repetitions: EV = probability of winning × reward − probability of losing × risk. A strategy with positive EV makes money over time even if it loses individual trades. It is the single metric that determines long-run profitability, which is why a low win rate can still be highly profitable with a large enough reward-to-risk.