For Business

Trading Math

How to Calculate Average Win and Average Loss

The average win is everything the winning trades made divided by how many there were, and the average loss is the same sum on the losing trades. This paper shows you the two piles on a list of ten real trades, which pile each trade went on, why one large loss moves the average past most of the small ones, and where the two piles come from on your platform.

Difficulty
Beginner
Reading time
5 min
Pages
7
Reviewed by
Saman Rahbar

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Two piles, two divisions

Every closed trade goes on one of two piles: the trades that made money and the trades that lost it. The average win is the first pile added up and divided by the number of trades on it; the average loss is the same for the second. On the ten-day list — one lot of the euro against the dollar bought at each day's open and sold at its close, 24 August to 4 September 2026, ignoring the spread — the four wins came to $918, an average of $229.50, and the six losses came to $1,447, an average of $241.17. A pip is the fourth decimal place, ten dollars at one lot, so those are 23.0 and 24.1 pips.

The ten, on their piles

Here are the ten trades sorted onto their piles. The wins pile holds 25 August at $142, 27 August at $26, 31 August at $363 and 3 September at $387: $918. The losses pile holds 24 August at $129, 26 August at $228, 28 August at $710, 1 September at $239, 2 September at $18 and 4 September at $123: $1,447. Each pile is divided by its own count, four and six, and nothing on one pile is ever mixed with the other — which is why the two averages are two numbers and not one.

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