Calculator
Use positive values. Gross loss is the absolute sum of losing trades.
Sum of winning trades (before netting losses).
Absolute sum of losing trades (enter as positive).
Example: “NQ RTH only” or “Setup: Pullback A”.
Profit factor formula + worked example
Keep this block “citable”: definition, formula, and numbers.
Gross profit = sum of winning trades. Gross loss = absolute sum of losing trades. If gross loss is 0, PF is effectively infinite for that period.
PF of 1.6 means you make $1.60 for every $1.00 lost (gross), over the period measured.
What is a good profit factor in trading?
Benchmarks are context-dependent. Use these ranges as a starting point - then validate by setup/session and sample size.
| Profit Factor | Interpretation | Common reality check |
|---|---|---|
| Below 1.0 | Unprofitable over the period. | Costs, risk drift, or no edge by setup. |
| 1.0–1.3 | Thin edge (fragile). | Can vanish after costs or during regime shifts. |
| 1.3–1.7 | Decent (if stable). | Check drawdown + expectancy + setup segmentation. |
| 2.0+ | Strong (if repeatable). | Make sure it’s not one outlier trade. |
Profit factor vs win rate
Win rate alone can be misleading. PF improves the picture because it uses total wins vs total losses.
A high win rate can still lose money if losses are large or costs eat the edge.
PF tells you how much you make per $1 lost (gross). It’s better for comparing setups - especially in futures where costs matter.
Expectancy translates outcomes into “edge per trade.” Use both: expectancy in trading.
Common profit factor mistakes
These are the reasons PF gets misused in trading reviews.
A handful of trades can create “great PF” from one outlier win. Segment by setup and review meaningful trade counts.
PF on gross results can overstate edge. Track commissions/slippage and review net behavior.
PF across all trades hides which setups actually have edge. Compare PF by setup + session.
PF doesn’t tell you average win/loss or “edge per trade.” Pair PF with expectancy and drawdown.
FAQ
Profit factor calculation
Profit factor is gross profit ÷ gross loss (absolute value). Example: $4,000 gross profit and $2,500 gross loss gives PF = 1.6.
What is profit factor in trading
Profit factor measures how many dollars you make for every dollar you lose, using total wins vs total losses over a period. It’s most useful when segmented by setup and session.
What is a good profit factor in trading
Many traders view 1.3–1.7 as decent and 2.0+ as strong - if it holds across enough trades and includes costs. Always validate with expectancy, drawdown, and stability by setup/session.
Can profit factor be negative
No. Profit factor can’t be negative because it’s a ratio of positive totals. It can be 0 if you have no winning trades, and it can be infinite if gross loss is 0.