Average Loss
Average Loss tells you, on average, how much money you lose on your losing trades. It helps you understand the typical size of your losses. Average Loss = Total Loss from Losing Trades / Number of Losing Trades Example 1:…
Category Education
Average Win
Average Win represents the mean profit amount from your winning trades. It helps you understand the typical gain when a trade is successful. Average Win = Total Profit from Winning Trades / Number of Winning Trades A trader uses their Average Win to understand the potential upside of…
Win/Loss Ratio
The Win/Loss Ratio is a simple way to see how often you win compared to how often you lose when you’re trading. This number tells you if you’re winning more trades than you’re losing, which helps you know if your…
Win Rate
Win Rate tells you what percentage of your trades are profitable. It shows how often you make money on your trades. It answers the basic question: “Out of all my trades, how many did I win?” Win Rate = ( Number of Winning Trades…
What is Profit Factor?
Profit Factor is the ratio of your total profits to your total losses. It’s a quick and easy way to see if you’re making more than you’re losing. For instance, if your Profit Factor is 2.0, it means you’re making…
Synthetic Covered Call
A synthetic covered call is an options strategy aimed to mimic the benefits of a traditional covered call, but without actually owning the underlying stock. It’s created by selling a put option, which generates income and can also be called a naked put.…