Total gross profits divided by total gross losses. PF > 1.0 = profitable. PF 1.0-1.3 = thin edge. PF 1.3-2.0 = solid. PF > 2.0 = strong. A profit factor of 1.5 means for every $1 lost, $1.50 is gained
Total gross profits divided by total gross losses. PF > 1.0 = profitable. PF 1.0-1.3 = thin edge. PF 1.3-2.0 = solid. PF > 2.0 = strong. A profit factor of 1.5 means for every $1 lost, $1.50 is gained. Monitor profit factor monthly — if it drops below 1.3, reduce position sizes until edge is re-established.