What it means
Positive expectancy after costs is the only thing that makes a strategy worth repeating.
Example
45% wins at 2R and 55% losses at 1R: 0.9 − 0.55 = +0.35R per trade.
In practice
Expectancy puts win rate and the size of wins and losses into one number: the average result of a trade. Multiplied by the number of trades, it estimates what a strategy can earn over time.
Traders calculate it from their journal, measured in R, and use it to compare strategies fairly. A method that wins only 35% of the time can still beat one that wins 60%.
What to watch for
It needs a large sample to mean anything and it applies to the average of many trades, not to the next one. A few rule-breaking losses can turn a positive figure negative.