Enter the maximum loss ($) and the spread width ($) into the calculator to determine the Probability of Profit.
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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 ($)
- SW is the spread width ($)
To calculate the probability of profit, divide the maximum loss by 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 (%)
