Profit factor calculator
Gross profit against gross loss – with win rate and expectancy alongside.
Short answer
Profit factor = gross profit ÷ gross loss, where gross profit is the sum of all winning trades and gross loss the sum of all losing trades as a positive number. Example: 18 winners making $5,400 and 22 losers losing $3,600 give a profit factor of 1.5, a win rate of 45%, an average win of $300, an average loss of about $163.64 and an expectancy of $45 per trade. Above 1 a system made money before costs not already included; below 1 it lost.
The formulas
Profit factor = gross profit ÷ gross loss.
Win rate = winners ÷ (winners + losers).
Average win = gross profit ÷ winners; average loss = gross loss ÷ losers.
Expectancy per trade = (gross profit − gross loss) ÷ number of trades.
Profit factor or expectancy?
Profit factor tells you how much the system earns per unit it loses; expectancy tells you what an average trade earns. Two systems with the same profit factor can have very different expectancy if one trades much bigger or much more often. Read both, together with the sample size – see the expectancy calculator.
Fees belong in the result
Use results after fees and funding. A profit factor of 1.1 before costs can be below 1 after them. Edgetrail calculates every metric from results after fees, to eight decimal places, and shows it per system with its sample size. Edgetrail costs $24 a month or $199 a year; the first 50 Founders pay $99 once, after that a Lifetime plan costs $249 once. The first 14 days are free without a credit card, and every payment comes with a 14-day money-back guarantee.
Glossary
The terms on this page – profit factor, win rate, expectancy and sample size – are defined in the trading metrics glossary.
Updated:
Frequently asked questions
What is a good profit factor?
Above 1 a system makes money; how much above depends on the market and the number of trades. Judge it together with expectancy, drawdown and the sample size.
How do you calculate profit factor?
Add up all winning trades (gross profit) and all losing trades as a positive number (gross loss), then divide gross profit by gross loss.
Can profit factor be misleading?
Yes, with few trades. One large winner can lift the profit factor of a small sample a lot; more trades make it more reliable.
Keep reading
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