How do I analyze the back tested strategy either it is optimized or not?
I have back tested the one of the strategy and results are shown below. Should I consider this as optimized? I do see a draw down also significantly high. I referred the pine script documentation to analyze. But, I couldn't understood clearly.
The higher the profit factor the better.
The lower the drawdown the better. In your case, your drawdown is significantly high, 196% drawdown means that your account equity went negative. If my maths is correct, if you had $100,000 capital, your account was in -$196,000 drawdown. People usually aim for less than 10% drawdown.
12 trades is also not enough to judge whether a strategy is good or bad. People usually aim for atleast 100 closed trades.
Win rate/percent profitable and profit are indirectly proportial with each other in large amount trades, meaning the higher the win rate, the lower the profit, and vice versa.