Master Trading Probabilities with the Expected Return Stock Calculator

The expected return stock calculator helps you make trading decisions in the face of uncertainty. Traders face immense uncertainty because we just never know exactly what will happen to the stock price next. But what we can often do is come up with a range of scenarios and put a likely probability on each of them. Coming up with scenarios and probabilities is more powerful than predicting a certain outcome, because we are likely to be wrong in our predictions frequently. If we instead make decisions based on the probability of certain outomes we are more likely to succeed and make money in the long term.

With the Expected Return Stock Calculator, traders can easily estimate the expected profit based on entry price, number of shares purchased, and the probability of various scenarios for the final stock price. This calculation can help you make better decisions in despite the uncertainty in the markets.

Quickly Estimate Your Expected Profit Potential

The Expected Return Stock Calculator is designed to help you determine the expected profit based on multiple scenarios for the final stock price. By inputting the entry price, the number of shares purchased, along with the probability of up to five different scenarios for the final stock price, the calculator below gives you an expected return based on the probability of each scenario. This enables you to better assess the risk-reward ratio of your trades and make adjustments as needed.

The Expected Return Stock Calculator:

 

Expected Return Stock Calculator

Starting Stock Price and Position Size

The Current Stock Price is $per share
# Shares Purchased
Your starting position value would be $

Scenario Probabilities

Probability of Scenario 1%
Stock Price Under Scenario 1 $per share
Probability of Scenario 2%
Stock Price Under Scenario 2 $Per Share
Probability of Scenario 3%
Stock Price Under Scenario 3 $Per Share
Probability of Scenario 4%
Stock Price Under Scenario 4 $Per Share
Probability of Scenario 5%
Stock Price Under Scenario 5 $Per Share
This total from all scenariosshould add to 100

Expected Stock Price and Trade Profit

Based on the scenarios and probabilities above, the expected stock price is $per share
Based on this expected stock price, if you bought at the current price your profit would be $per share
Based on this expected stock price and the number of shares purchased your total expected profit would be $
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How the Expected Return Stock Calculator Works

Using the Expected Return Stock Calculator is straightforward. Simply provide your entry price and number of shares purchased, and then input up to 5 scenarios for the final stock price along with your estimated probability for each scenario. Make sure your probabilities add up to 100% or else the calculation will not return valid results. The calculator will then generate the expected return taking into account the probability of your 5 scenarios. 

Why Use the Expected Return Stock Calculator?

Understanding the potential profit of a trade is essential for successful trading. Unfortunately we don’t know what the ultimate stock price will be when we enter the trade, but we can often come up with a range of scenarios and estimate the probabilities of the scenarios. The Expected Return Stock Calculator provides you with a clear picture of the expected outcome based on the scenarios and probabilities you enter. The expected outcome needs to be profitable for you to win in your trading long term.

Conclusion: Maximize Your Stock Expected Return Calculation

The Expected Return Stock Calculator is a powerful tool that can help you optimize your trading decisions and ensure you only take trades with a positive expected profit. By considering multiple scenarios for the final stock price and calculating the expected return for each, we can get a better sense of the likely trade profit compared to making a single share price prediction… Predictions are very inaccurate, so use the scenarios and probabilities method and start making better trading decisions today!!

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