How We Calculate Edge Score, Expectancy, Profit Factor and the Risk Desk Budget
Every number in The Trading Terminal comes from the trades and rules you enter. This page sets out, in plain English, how the main ones are worked out. The formulas and weightings below are taken from the app's code as it stands on 5 October 2026, not from marketing copy.
By Harrison Weaver · Updated 18 October 2026
The ground rules
- Closed trades only. Win rate, expectancy, profit factor, drawdown, the Edge Score and the Risk Desk figures use closed trades. Open positions are not counted.
- Net P&L. Profit and loss figures are net of the fees you log.
- Outcome. Each closed trade is a Win, a Loss or Break Even. Trades with no outcome are left out of win rate.
- R. R is the multiple of the risk you took on a trade. A trade that makes twice its risk is +2R; a full stop-out is about -1R.
- Description, not advice. These figures describe your own history. They do not tell you what to trade, which firm to use or how much to risk.
Win rate
Win rate is wins divided by graded outcomes (wins + losses + break-evens), multiplied by 100. A closed trade with a blank or other outcome does not dilute the result.
Expectancy
Expectancy is the average result you can expect per trade given your history. In R, it is win rate × average R of winning trades − loss rate × average R lost on losing trades. Only trades with a recorded R are used for the two averages, and if you have no recorded losing R the loss average defaults to 1R. Trader DNA, the Edge Score and Trade Lab use this version.
The Analytics page also shows expectancy in money: win rate × average winning trade − loss rate × average losing trade, using net P&L, and an R version that averages the signed R of your wins and losses.
Profit factor
Profit factor is the total net P&L of your winning trades divided by the absolute total net P&L of your losing trades. Above 1 means your winners outweighed your losers in total. With no losing trades it is shown as infinite (or zero if there are no wins either).
Max drawdown
Max drawdown is the largest fall from a running peak to a later low in the cumulative net P&L of your closed trades, in date order. The drawdown percentage in the Analytics summary, the Journal and Trading Seasons is measured against your account equity at the start of the period: the starting balances of the accounts involved plus any profit made before that period. Where there is no starting balance, they show “—” instead of a percentage. The Drawdown % chart in Analytics has its own setting: by default it shows the fall from your highest running profit as a percentage of your starting balance, and it can instead show how far equity sits below the starting balance or an adjusted balance. The Edge Score uses the money value and compares it with your total net profit.
Edge Score
The Edge Score is a 0-100 score built from six signals on your closed trades. The points add up and are capped at 100.
| Signal | Points | How points are earned |
|---|---|---|
| Expectancy | up to 30 | 15 points for each 1R of expectancy, capped at 30. Zero if expectancy is not positive. |
| Win rate | up to 20 | 20 at 60% or more, 15 at 50%, 10 at 45%, 5 at 40%, otherwise 0. |
| Drawdown control | up to 20 | Largest drawdown as a share of total net profit: 20 under 10%, 16 under 20%, 12 under 35%, 8 under 50%, 4 under 75%, otherwise 0. Zero if you are not net profitable. |
| Sample size | up to 10 | 2 for a minimum sample of 5 closed trades, then 4 at 25 trades, 6 at 50, 8 at 100 and 10 at 200 or more. |
| Rule adherence | up to 10 | Share of trades with a mistake tag: 10 under 5%, 8 under 15%, 6 under 25%, 4 under 40%, 2 under 60%, otherwise 0. |
| Execution quality | up to 10 | Average trade grade (A+ = 4, A = 3, B = 2, C = 1, D = 0; ungraded trades are ignored): 10 at 3.5 or more, 8 at 2.8, 6 at 2.2, 4 at 1.5, otherwise 2. |
Worked example (sample, not a real account)
This account is invented to show how the rules above add up. It has 120 closed trades with the same amount risked on each, so every figure below follows from the thresholds in the table.
| Signal | Sample input | Points |
|---|---|---|
| Expectancy | +0.40R per trade | 6 of 30 |
| Win rate | 54.2% (65 wins, 52 losses, 3 break-even) | 15 of 20 |
| Drawdown control | Largest drawdown $1,050 against $4,800 net profit = 21.9% | 12 of 20 |
| Sample size | 120 closed trades | 8 of 10 |
| Rule adherence | 36 of 120 trades (30.0%) have a mistake tag | 4 of 10 |
| Execution quality | Average grade 2.4 | 6 of 10 |
| Edge Score | The six signals added together | 51 out of 100 |
The points above are produced by running the app's own Edge Score calculation on this sample. They show how the thresholds work and nothing more.
The Edge Score describes how your logged results score against these rules. It is not a forecast and not a trading signal.
Process Score
Process Score averages the grades you give your trades, with A+ = 5, A = 4, B = 3, C = 2 and D = 1, and shows the result out of 5. It reflects how well you rate your own process, not your P&L. (The Edge Score uses a separate 0-4 grade scale, described above.)
Mistake Cost Analysis
For each mistake tag you use, Mistake Cost Analysis adds up the net P&L of every closed trade carrying that tag, and shows the number of trades, the win rate, the total P&L and the average P&L. Tags are ranked from the lowest total P&L upwards, so the most expensive habit appears first. A trade with several tags counts under each of them. It also compares the average P&L of tagged trades with the average of trades that have no mistake tags.
This is the result of the trades you tagged. It does not estimate what those trades would have made without the mistake.
Risk Desk daily risk budget
Risk Desk works per account, from the rules you enter and your closed trades.
- Daily loss limit = starting balance × daily loss limit %.
- Drawdown limit = starting balance × max drawdown %.
- Today's loss = the loss on today's closed trades (zero if you are up on the day).
- Room to the daily limit = daily loss limit − today's loss, floored at zero.
- Drawdown room = current balance − the drawdown floor. For a fixed drawdown the floor is the starting balance less the drawdown limit. For a trailing drawdown the floor is the highest balance reached (measured intraday or at end of day, as you choose) less the drawdown limit, and it can lock once the account reaches a level you set.
- Raw budget = the smaller of the room to the daily limit and the drawdown room. The daily risk budget is the raw budget multiplied by a safety buffer, which defaults to 0.9.
- Consumption = today's loss ÷ the starting room (the smaller of the daily limit and drawdown room plus today's loss), capped at 100%.
- Trades remaining = daily risk budget ÷ a typical risk amount, where the typical risk amount uses the median risk % of your last 20 trades that have a risk % logged (1% if none).
Distance-to-breach bars are green below 50% consumed, amber from 50% to 80% and red from 80%. Alert banners appear at 70% (warning) and 90% (critical). Because Risk Desk uses closed trades, open positions are not reflected until they close. Risk Desk describes your position against the rules you entered; the rules themselves come from your firm.
Trader DNA and Trade Lab
Trader DNA groups your closed trades by instrument, session, setup, direction, entry timeframe, grade, market conditions, day of week and confluence, and shows the expectancy in each group. The "Biggest Weaknesses" list shows groups with at least 5 trades and an expectancy below -0.3R. In Trade Lab, a strategy's sample confidence is strong at 20 or more matched trades, directional at 5 to 19 and thin below that.