how to use the memecoin expected value calculator
- Enter your usual stake per trade.
- List the outcomes: what the stake is worth at the end (0x for a rug, 1x for flat, 5x for a 5x) and how often each happens. Chances must add up to 100%.
- Use your own trade journal for the numbers; the presets are only illustrations.
- Read the expected value, the chance of losing money and the Kelly fraction.
formula
average outcome = Σ chance × multiple expected value per $1 = average outcome − 1 Kelly fraction f maximises Σ chance × ln(1 + f × (multiple − 1))
positive EV with a 70% loss rate
Memecoin strategies usually lose on most trades and live on a few big winners. Losing 7 trades in 10 can still be profitable if the winners pay enough: the expected value adds every outcome weighted by how often it happens. The reverse also holds: a high win rate with small wins and occasional rugs can be negative EV.
EV is not enough
A positive expected value is necessary but not sufficient. If you bet too much of your bankroll per trade, a normal losing streak wipes you out before the winners arrive. The Kelly fraction shows the bet size that grows the bankroll fastest in the long run; most traders use a half or a quarter of it. Test your numbers in the risk of ruin calculator.
frequently asked questions
How do you calculate expected value in trading?
Multiply each possible outcome by its probability and add them up, then subtract the stake. If 70% of trades go to zero, 20% double and 10% do 10x, the average outcome is 1.4x: +40% expected value per trade.
Is memecoin trading positive expected value?
It depends entirely on your numbers. Buying random fresh launches is strongly negative for most people because most tokens go to zero; selective strategies with strict exits can be positive. Plug in your real results to find out.
What is a good expected value per trade?
Any positive value is an edge, but small edges need many trades and small bet sizes to show up. Compare it with the Kelly fraction to size bets sensibly.
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