Enter the maximum loss ($) and the spread width ($) into the calculator to determine the Probability of Profit.
Probability of Profit Formula
The following formula is used to calculate the Probability of Profit.
PoP = ML / SW * 100
- Where PoP is the Probability of Profit (%)
- ML is the maximum loss ($)
- SW is the spread width ($)
How to Calculate Probability of Profit?
The following example problems outline how to calculate Probability of Profit.
Example Problem #1:
- First, determine the maximum loss ($). In this example, the maximum loss ($) is given as 60.
- Next, determine the spread width ($). For this problem, the spread width ($) is given as 100.
- Finally, calculate the Probability of Profit using the equation above:
PoP = ML / SW * 100
The values given above are inserted into the equation below:
PoP = 60 / 100 * 100 = 60 (%)
Example Problem #2:
The variables needed for this problem are provided below:
maximum loss ($) = 75
spread width ($) = 200
Entering these values and solving gives:
PoP = 75 / 200 * 100 = 37.5 (%)
