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General TradingP
Profit Factor
A trading performance metric calculated by dividing gross profits by gross losses. A profit factor above 1.0 indicates a profitable system; values above 2.0 are considered strong.
Example
“A trader's backtest shows $30,000 in gross profits and $15,000 in gross losses, yielding a profit factor of 2.0 — meaning the strategy earns $2 for every $1 it loses.”