I am wondering what people think about Profit Factor. My issue is due to the formula:

$profit/$lost for a period

So, although mathematically, when $lost=0 this value approaches infinite. What is typically reported in this case when $lost=0?

NJAMC 

I am wondering what people think about Profit Factor. My issue is due to the formula: $profit/$lost for a period So, although mathematically, when $lost=0 this value approaches infinite. What is typically reported in this case when $lost=0?

I think it gives null or divide by zero error when i calculate it in spreadsheet form. I think in my platform it goes wacky like 1000 or something. I guess you could just always have a denominator to eliminate that or come up with a flag if that does occur.

Just as a general thoughts on PF. I really like it as a measure, i think its one of the top 3 things I look at because it is risk adjusted and easy to compare against other systems. If I ever did have a system where I didn't take at least 1 loss and not have an error, I would be highly suspicious anyway.

treydog999 

I think it gives null or divide by zero error when i calculate it in spreadsheet form. I think in my platform it goes wacky like 1000 or something. I guess you could just always have a denominator to eliminate that or come up with a flag if that does occur. Just as a general thoughts on PF. I really like it as a measure, i think its one of the top 3 things I look at because it is risk adjusted and easy to compare against other systems. If I ever did have a system where I didn't take at least 1 loss and not have an error, I would be highly suspicious anyway.

Thanks,

I was wondering if there was some generally acceptable answer. I can screen for a $0 loss and replace the value with something. I was thinking around 1000 and might use that value. I would be suspicious as well with the value unless I was only expected a very rare trade due to the strategy. Just want to be able to handle the exceptions correctly (or as well accepted).