What makes up the characteristics of a profitable trading system? It has a positive expectancy or an “Edge” which means it makes more money than it loses in the long term. Losses have to be accepted as a natural part of the trading system and business. The key is to have more wins than losses or larger wins than losses to average out into profitability in the long term. Trading with an edge is what sets apart experienced traders from new ones. Experienced traders have a positive expectancy trading system in place which they follow- and don’t allow media hype of meme stocks, greed, or emotions to get in the way of their execution. So what does expectancy even mean? Expectancy = (Probability of Win * Average Win) - (Probability of Loss * Average Loss) If expectancy is greater than 0, you have a profitable system on your hands. If expectancy is less than 0, you have a non-profitable system and it’s time to find a new one. To make things easier here is the link to access our Expectancy Calculator: Expectancy / Profit Factor Calculator Just plug in the numbers and we’ll do the math for you! To read more about the Importance and Characteristics of a Winning Trading System, read our blog post: Characteristics of a Winning Trading System