Expectancy and metrics determine whether behavior produces results. They convert execution history into evidence and remove interpretation from performance evaluation. This section exists to verify edge, not to justify trades.
What Expectancy Represents
Expectancy measures average outcome per trade. It answers a single question: What does this behavior produce over time when repeated under discipline? Positive expectancy confirms viability. Negative expectancy signals removal or adjustment.
Expectancy as a Gate
Expectancy is evaluated at the setup level. Each setup is reviewed independently based on:
- win frequency
- average win size
- average loss size
- consistency of execution
A setup does not qualify for continued use until expectancy is positive across sufficient repetition.
Metrics Over Outcomes
Single outcomes carry no evaluative weight. Metrics summarize behavior across samples and reveal whether execution aligns with design. This prevents reaction to variance and focuses attention on repeatability. Metrics replace opinion.
Sample Integrity
Expectancy requires sufficient data. Evaluation occurs only after a meaningful number of trades using the same rules. Partial samples are tracked but not trusted. Consistency of execution is required for metrics to be valid.
Profit Factor as Confirmation
Profit Factor summarizes realized performance. It compares total gains to total losses and reflects the effectiveness of execution across a series. Profit Factor complements expectancy by validating whether theoretical edge appears in practice. Together, expectancy and Profit Factor provide a complete picture.
Review Cadence
Metrics are reviewed on a fixed schedule. Common review intervals include:
- short samples for early signal
- larger samples for confirmation
- rolling reviews to detect degradation
Regular review prevents drift and preserves alignment.
Decision Rules
Metrics drive decisions.
- Positive expectancy supports continuation.
- Flat expectancy signals refinement.
- Negative expectancy triggers suspension or removal.
Decisions follow evidence without negotiation.
5E Mantra
Measure what you repeat. Repeat what works. Remove the rest.