How to calculate profit factor
Profit factor = gross profit ÷ |gross loss|, the total of your winning trades divided by the absolute total of your losing trades.
Worked example
10 trades: 4 winners totalling $900, 6 losers totalling −$600. Profit factor = 900 ÷ 600 = 1.5. You earned $1.50 for every $1 lost.
Excel / Google Sheets
=SUMIF(J2:J500,">0")/ABS(SUMIF(J2:J500,"<0"))
From win rate and averages
PF = (win rate × average win) ÷ (loss rate × average loss). 40% × $225 ÷ (60% × $100) = 1.5. Try it in the profit factor calculator.
Interpreting it
- < 1.0: losing money.
- 1.0–1.3: thin edge; fees and slippage matter a lot.
- 1.5+: often considered solid over a large sample (100+ trades).
- Very high values on few trades are usually noise.
Common mistakes
- Leaving out commissions and ECN fees.
- Counting partial fills as separate trades.
- Judging on a tiny sample.
FAQ
What is a good profit factor?
Above 1.0 is profitable; many traders consider 1.5 or more over 100+ trades a solid edge, though there's no universal threshold.
How is profit factor different from win rate?
Win rate counts how often you win; profit factor compares how much you win to how much you lose.
Can profit factor be infinite?
If you have no losing trades the formula divides by zero; that only happens with tiny samples.
Educational content, not financial advice. Updated 2026-10-16.