Risk management
The idea
Expectancy combines win frequency with average win and average loss, after costs. A high win rate can still lose money when occasional losses are large. Scaling into or out of a position changes the exposure path; recalculate total planned risk rather than looking at each order in isolation.
A worked example
At a 40% win rate, 2R average wins and 1R average losses, gross expectancy is 0.2R per trade. Costs of 0.25R would turn it negative.
Try it yourself
Calculate expectancy under several cost assumptions and describe how adding a second order changes combined exposure.
A mistake to avoid
Increasing size after a short winning streak without enough evidence about the distribution of outcomes.