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Trading glossary

What is Profit Factor?

Risk ManagementIntermediate

Profit factor is the ratio of total winning trades to total losing trades in monetary terms. A profit factor of 2.0 means you make £2 for every £1 you lose. Anything above 1.0 is profitable; above 1.5 is considered good; above 2.0 is excellent.

Related terms: Win Rate Expectancy Risk/Reward Ratio

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