Profit, Reliability, Restoration Factors

[sookiat]

Hi there, I know the meaning of these factors are as their names imply, but how exactly are these factors calculated?

Example for Profit Factor, I have seen parameters for strategies that have a higher Net Profit yet lower profit factor.

Can someone enlighten me please? Thanks!

[FT Support]

Profit factor - Gross profit/gross loss.
Restoration factor - (Gross profit - GrossLoss)/Max drawdown.
Reliability factor - Profit per month/Max drawdown.

[sookiat]

Profit factor - Gross profit/gross loss.
Restoration factor - (Gross profit - GrossLoss)/Max drawdown.
Reliability factor - Profit per month/Max drawdown.

Thank you very much

[donhwaande]

I've just had a minor brain melt trying to picture this.

Could someone abit smarter help me out here:

How does the Profit factor correlate to your over all risk / reward?


For example If i make $100 and lost $25 my profit factor would be 4 right?

So an overall risk reward of 1:4 (correct?)


Therefore could it be said that my 'profit factor' is equal to my: on average, proven, risk / reward?
(So not what ever strategy you follow - what your results ACTUALLY are yielding)

I.e. overall on a given currency pair = Per 1 risk I take 4 reward ? 1 : 4

[FX Helper]

Hello,

Yes, Profit factor means the (sum of your profit trades)/(sum of your losing trade). So if the sum of profit orders is 100 and sum of losing orders is 25 then profit factor=4.

Yes, this will be 1:4 risk/reward ratio in this case, because the you risked 25$ and reward was 100$. But risk/reward ratio usually used for opened orders.

[Magma]

What is a Reliability Factor? Also, what is a good RELIABILITY FACTOR? For example, as far as expectancy goes, if I risk $1, then my expectancy has to be at least 1. If it's less, then my reward will be less than my risk. Also, what is considered to be a bad and a good RESTORATION FACTOR? Where's the boundary between good and bad?