Four questions for a report
A green number on a report is like one exam mark; it does not describe every ability. Ask four questions: what was the net result, how many trades were involved, what drawdown path occurred, and which costs were included? We use a deliberately small sample so the arithmetic is transparent, not because a small sample establishes a reliable strategy.
Our ten-trade example
Six trades earn two units each and four lose one unit each. Gains total twelve units and absolute losses total four, producing a net result of eight. The win rate is six out of ten, or sixty percent. Our unit is abstract; do not substitute dollars or a percentage of equity without further information. These calculations have not established anything certain about future trades.
A ratio is not an average
Profit factor divides total gains by absolute total losses: twelve divided by four equals three. Average trade result divides the net result by the trade count: eight divided by ten equals zero point eight units. A profit factor of three does not mean the account tripled. With no losses, the denominator is zero; a large or undefined display is not evidence of a risk-free system.
Deduct a cost once
Suppose costs have not been deducted and each trade costs zero point three units. Ten trades then cost three units. The gross net result of eight becomes five, averaging half a unit per trade. Do not deduct an expense again when the report already includes it. After-cost profit factor must also be recalculated from adjusted individual gains and losses; it cannot simply be assumed unchanged.
Same total, different sequence
Rearrange those six winners and four losers. Four consecutive losses after a peak create a different drawdown path from scattered losses. The final total can be the same while the experience differs. Closed balance also differs from equity including open positions. Without the ordered path and relevant data, we cannot infer exact drawdown from the final net result alone.
Exercise with a checkable answer
Write four answers: sixty-percent win rate, gross profit factor three, raw average zero point eight and average after the specified costs zero point five units. Explain why exact drawdown is still missing. For an additional exercise, construct two orderings of the same results and calculate their cumulative paths. This is report-reading practice, not validation of a real Expert Advisor. Next we examine execution costs.