What is "Profit Factor"?
It is used to determine whether you have good risk management. Traders who have a high profit factor tend to do better than traders who have a low one.
Example A profit factor of 1 means you are breaking even. A profit factor of 2 means for $1 that you risk, you make $2. If you lose all your trades for the day or have no losses, your profit factor will be 0.
How is it calculated?
(Sum of your net winning trades) / (Sum of your net losing trades)
