Profit Factor is a financial metric that is widely used in the world of automated trading to evaluate the efficiency of a trading strategy. It is calculated as the gross profit divided by the gross loss (including commission) achieved by the trading strategy.
This measure tells us what is the profit produced per unit of risk. A Profit Factor greater than 1 means the strategy is generating more profit than loss, suggesting that the strategy could be profitable in the long run. Conversely, a Profit Factor less than 1 would indicate that the strategy is losing money.
