<h2>Net Profit Margin</h2>
<p>Net Profit Margin, a crucial metric in trading, quantifies the net profit as a percentage of revenue. It's a key performance indicator (KPI) that helps traders evaluate the profitability of their strategies.</p>

<h2>How It Works</h2>
<p>Net Profit Margin is calculated using the formula:</p>
<table>
<tbody>
<tr>
<td><strong>Net Profit Margin</strong></td>
<td>=</td>
<td><strong>Net Profit</strong></td>
<td>/</td>
<td><strong>Revenue</strong></td>
<td>x 100%</td>
</tr>
</tbody>
</table>
<p>Where:</p>
<ul>
<li><strong>Net Profit</strong> is the total revenue after deducting all expenses, including costs of goods sold, operating expenses, interest, taxes, and preferred dividends.</li>
<li><strong>Revenue</strong> is the total income from sales or services.</li>
</ul>

<h2>Why It Matters for Traders</h2>
<p>Net Profit Margin is vital for traders as it:</p>
<ul>
<li>Measures the efficiency of a trading strategy.</li>
<li>Helps compare the profitability of different instruments or strategies.</li>
<li>Assists in setting realistic profit targets.</li>
</ul>

<h2>Example</h2>
<p>Suppose a trader closes a position on EUR/USD with MetaTrader 5, making a profit of $500 on a $10,000 investment. The revenue is $10,000, and the net profit is $500. The Net Profit Margin would be:</p>
<table>
<tbody>
<tr>
<td><strong>Net Profit Margin</strong></td>
<td>=</td>
<td>$500</td>
<td>/</td>
<td>$10,000</td>
<td>x 100%</td>
<td>= 5%</td>
</tr>
</tbody>
</table>

<h2>Key Takeaways</h2>
<ul>
<li>Net Profit Margin is a percentage that measures the net profit relative to revenue.</li>
<li>It's calculated by dividing net profit by revenue and multiplying by 100%.</li>
<li>Traders use Net Profit Margin to evaluate strategy efficiency, compare profitability, and set profit targets.</li>
</ul>