The formula is only the start
Profit Factor is gross profit divided by gross loss. A high value on a small sample can be random.
Add risk context
Evaluate it alongside maximum drawdown, average risk and the distribution of results across strategies.
How to read the metric together with drawdown, trade count and consistency.
Profit Factor is gross profit divided by gross loss. A high value on a small sample can be random.
Evaluate it alongside maximum drawdown, average risk and the distribution of results across strategies.