Expected value (EV) combines win rate and risk/reward ratio into a single number representing the average result per trade if a strategy were repeated many times: (win rate × average win) − (loss rate × average loss). A positive EV means the strategy is mathematically profitable over a large enough sample, even though any individual trade can still lose; a negative EV means no amount of good execution fixes the math.
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TRADING GLOSSARY
Expected Value
The average profit or loss per trade a strategy produces over many repetitions.