Excel Expectancy (tharp) issue

jmhunter · Oct 16, 2011

This is very basic.. but here is my excel spreadsheet

http://www.jmhunter.info/ES Log 101011-101311.xlsx

I'm having issues making the expectancy formula show a good number.. I followed the two equation around page 202, but that one isn't working quite right.. any input?

jmhunter · Oct 16, 2011

(the one that i dont think is working is in red)

jmhunter · Oct 17, 2011

i figured it out.. changed to =AVERAGE( instead of =SUM

trade4ever2day · Oct 17, 2011

What good to you is that number?

jmhunter · Oct 17, 2011

Quote from alexandermerwe:

What good to you is that number?

http://www.iitm.com/sm-Expectancy.htm

That is tharps def of it.

I am using it to evaluate my risk, adjust my stops, and understand what I should expect from my system

jmhunter · Oct 17, 2011

-- risk to reward ratio

trade4ever2day · Oct 17, 2011

Quote from jmhunter:

http://www.iitm.com/sm-Expectancy.htm

That is tharps def of it.

I am using it to evaluate my risk, adjust my stops, and understand what I should expect from my system

From that website: "Put another way, expectancy tells you how much you can expect to make on the average, per dollar risked, over a number of trades."

Why is this guy using a new term - expectancy - for a number that even a ten-year old knows it is the average of all trades?

Can I also hijack the concept of summation of trades and call it, for example, sumtendency?

I think this guy presents in a very complicated and incomprehensible way what is clear to every trader who has gone to high school.

N54_Fan · Oct 17, 2011

As mentioned above it is an average of the total R per trade. Add the R's in D column and divide by th enumber of trades. Just gives average R earned per trade.

intradaybill · Oct 18, 2011

Quote from N54_Fan:

As mentioned above it is an average of the total R per trade. Add the R's in D column and divide by th enumber of trades. Just gives average R earned per trade.

I don't think you can add the R's because they are different numbers R1, R2,...etc.

Am I the only one who can see this? I also pointed that out here:

http://www.elitetrader.com/vb/showthread.php?s=&postid=3330917#post3330917