Backtesting only establishes *that* something works, not why. "Why" is nice! Why is what I'd want to know! Why would let me (most likely) feel comforted in confirming my biases. But I can hang with merely being profitable.
Why so? I mean by averaging you lose some important details about the variance of losing/winning trades which is crucial for leveraged trading.
When you figure out if you have a trading edge, you compare your average gain versus your average loss. Obviously, you want a bigger average gain, say $800 to an average loss of say $300. It does not affect leverage, why would it? You are just using your past trades to figure out if you have an edge. With your win percentage, plus the average gain and average loss, you can figure out if you have an edge or not. Stock options already have leverage built into it. You want more leverage? Trade forex or futures. Of course, the higher the leverage, the higher the risk!
Given Entry, Exit, TP and SL is not sufficient data to verify if a system works because you also need leverage and position size to estimate if your position can tolerate drawdown to particular trade SL. This is what I meant, max drawdown per trade and maybe its averaged value is also important to consider.