What are PF and DD? How to choose EA and turning it into a sign-in issue.
Story of using an excellent EA as a sign indicator.
To aim for stable profits in trading, it is important to choose an EA with a good balance between the profit factor (PF) and and maximum drawdown (DD).
Refer to the table below and consider risk and return when making your choice.
So what are PF and DD? Here they are.
Profit Factor (PF)
→ Calculated as total profit ÷ total loss, preferably above 1.5. Exceeding 2.0 is considered excellent.
Example:PF=2.0 means you made 2 million in profit for every 1 million in loss.Drawdown (DD)
→ The maximum reduction rate of assets (maximum loss amount).Below 20% is ideal, exceeding 30% is high risk.
Example:DD=25% means assets of 1,000,000 temporarily dropped to 750,000.This is roughly how it looks in the table.
Evaluation criteria for Profit Factor (PF)
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