2/29(Thu) Mysterious discovery of the Profit Factor

EA developers are the double i.e. of the Reiwa era.

EA can backtest, you know.

And various numbers come out, right~.

And what everyone often looks at is

Profit Factor, I think.

For example, PF=1.50,

you might think, “Oh, that’s high!”

Now when it goes into actual operation of the EA,

“Oh! I earned 1500 yen quickly!”

and then,

“Ah… I also lost 1000 yen...”

“I should have stopped when I was winning”

“Only +500 yen, not much.”

you might think.

…earned 1500 yen, lost 1000 yen…

But that’s Profit Factor = 1.50!

Profit Factor is 1.50.

Yet it can feel like a loss…

Some people may stop using that EA because of that.

But Profit Factor is 1.50.

Curious, isn’t it?

Rather than emotional judgments,

it’s necessary to judge with data as well.

Also, if Profit Factor = 1.20,

it means you earned 1200 yen and then lost 1000 yen.

That difference is 200 yen,

an EA with PF 1.50 trades were extremely many more times

would trade frantically

and end up with thin profits

even if it doesn’t feel profitable,

the 1.20 EA may, in the same period, be more profitable than the 1.50 EA,

and that can happen.

Having more trades and a higher Profit Factor might be good, but

now then

what was the maximum drawdown before achieving those profits?

How many positions and lots were used at maximum? In other words, what was the required margin at full position?

Does it mean starting funds can be small, or not?

Including the aforementioned 1.50’s mystery,

there are various things to think about.

Well then!

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【Reiwa’s Double-EA Listing】

https://www.gogojungle.co.jp/users/112481/products

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【Reiwa’s Double-E’s Serialized Articles】

■EA for Beginners

https://www.gogojungle.co.jp/finance/navi/series/1700

■No-Sugar-Coating! GoGoJungle Issues!

https://www.gogojungle.co.jp/finance/navi/series/1701

■Double-E FX Musings

https://www.gogojungle.co.jp/finance/navi/series/610

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【Reiwa’s Double-E’s Beliefs】

Develop EAs by straightforward methods,

and earn the trust of more people,

maintain a long-term WIN-WIN relationship,

aim to revitalize the EA market and improve literacy.

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