The formula
Expectancy is the average result of one trade, measured in R, the amount risked:
expectancy = win rate × average win − loss rate × average loss break-even win rate = average loss ÷ (average win + average loss)
At a 45% win rate with 2R wins and 1R losses, each trade is worth 0.45 × 2 − 0.55 × 1 = +0.35R. Risking 1% a trade, that is about +0.35% of the account per trade on average.
Why the typical account grows slower than the average
Gains and losses compound. A 10% loss followed by a 10% gain leaves you 1% down, not flat. So the growth the typical trader actually sees, the geometric one, sits below the simple average, and the gap widens as the risk per trade grows. That is why the calculator shows both.
The over-betting point
Every positive edge has a risk per trade above which the typical account shrinks over time, even though the average trade still wins. Growth is fastest at roughly half that point (the Kelly fraction), and even there the swings are brutal, which is why professionals risk a fraction of it. Past the fastest point, more risk only slows growth and deepens the drawdowns. See how deep they go in the risk of ruin simulator.
Where your numbers come from
Use at least thirty closed trades; under that, a win rate is mostly noise. Members of The Print Room keep these stats automatically in The Plan's journal.