In lay terms, it's simply how much profit per trade one would expect to average over time (based upon historical averages) for a given set-up. The formula: (average profit per winner * probability of winning) – (average loss per loser * probability of losing). This is also known as EV or “expected value.” Note: this number is far more important than just the probability of profits. It may feel good to have a high winning percentage, but it may not be profitable over the long term.
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