Definition of terms?
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Thread: Definition of terms?

  1. #1
    I'm taking a look at my trading summary over the previous two months and I see that an expected profit number but I'm not sure precisely what it means. Also, what is the profit element? I understand the expressions in general but not how they're measured so I do not understand how to translate the numbers I see. Is there a number?

    lt;TABLE cellSpacing=1 cellPadding=3 border=0gt;lt;TBODYgt;lt;TR align=rightgt;lt;TD colSpan=2gt;Profit Factor:lt;/TDgt;lt;TD colSpan=2gt;2.60lt;/TDgt;lt;TD colSpan=4gt;Expected Payoff:lt;/TDgt;lt;TDgt;30.03lt;/TDgt;lt;/TRgt;lt;/TBODYgt;lt;/TABLEgt;

  2. #2
    Quote Originally Posted by ;
    Profit factor -- the ratio between the gross profit and the gross reduction in per cents. One way that these amounts are equivalent; Expected payoff -- mathematical expectation of win. This parameter to be calculated statistically represents average profit/loss variable of a single trade. It may also be regarded as showing the expected profitability/unprofitability of the next commerce;
    So the profit variable informs me that on average I shall get 2.60 per dollar entered in a transaction? I still don't know what the expected payoff means - how is the expected profitability / unprofitability different than the profit factor?

  3. #3
    Quote Originally Posted by ;
    Therefore the profit variable informs me that on average I'll get 2.60 per dollar entered at a transaction?
    Nope I states that satistically your gross profit over certain time will be 2.6 times bigger than the gross reduction in that moment. Put simply if for examle in one month on all trades you lose (summed) 1000$ and won (summed) 2600$ (earning 1600$ net proffit for the month), then your profit variable was 2.6 (2600/1000).

    Quote Originally Posted by ;
    I don't know what the anticipated payoff means - what's the anticipated profitability / unprofitability different than the profit element?
    Expected payoff signifies, what your ordinary Profit on every single transaction was in absolute value. Take the last example: you made 100 transactions in one month and made 1600$ net profit. That means your (expected) payoff is 16$ (1600/100) each transaction.

  4. #4

  5. #5
    Quote Originally Posted by ;
    I am looking at my trading outline throughout the previous two months and that I see that an expected profit number but I am not sure exactly what it implies. Also, what exactly is the profit element? I know the terms in general but not how they are measured so that I do not know how to interpret the numbers I see. Is there a number?

    lt;table border=0 cellpadding=3 cellspacing=1gt;lt;tbodygt;lt;tr align=rightgt;lt;td colspan=2gt;Profit Factor:lt;/tdgt;lt;td colspan=2gt;2.60lt;/tdgt;lt;td colspan=4gt;Expected Payoff:lt;/tdgt;lt;tdgt;30.03lt;/tdgt;lt;/trgt;lt;/tbodygt;lt;/tablegt;

    Squid
    Profit factor -- the ratio between the gross profit and the gross loss in per cents. One way that these sums are equivalent;
    Expected payoff -- mathematical expectation of win. This parameter to be calculated statistically represents average profit/loss factor of a single trade. It may also be considered as showing the anticipated profitability/unprofitability of the next trade;

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