How to use the profit factor calculator
Choose the way you want to enter results:
- My trades. Paste the profit or loss of each closed trade, in any one unit (dollars, R multiples, points). This unlocks everything below, including the weight of your best trade, your longest losing streak and the bootstrap range.
- Gross profit and loss. Enter the two totals from your statement. Add the number of winning and losing trades to get the win rate, payoff ratio and expectancy as well.
- Win rate and payoff. Enter a win rate, an average win and an average loss to see the profit factor an assumed strategy would produce, optionally after a cost per trade.
What the other numbers add
- Payoff ratio. The average win divided by the average loss. A profit factor of 1.5 can be a 70% win rate with small winners or a 30% win rate with large ones, and the two feel very different to trade.
- Expectancy. The average result per trade. Profit factor is a ratio and ignores how many trades produced it; expectancy tells you what each trade is worth.
- Share of profit from the best trade. If one trade supplies a large part of the profit, the profit factor depends on it. The calculator shows the profit factor without it: in the example loaded above, a profit factor of 1.91 falls to 1.09 when the one outsized winner (43% of the gross profit) is removed.
- Likely range. The calculator re-samples your trades at random thousands of times and recomputes the profit factor each time. The range between the 5th and the 95th percentile shows how far the number could move on another run of the same trades. For the same example it runs from 0.64 to 4.75, and 13% of re-samples are below 1.
- Costs. Enter the commission and spread per trade. Costs are taken off every trade, so they hit the small winners hardest.
How reliable is a profit factor? It depends on the number of trades
Take a strategy whose true profit factor is exactly 1.5 (a 50% win rate, winners of 1.5 and losers of 1). Repeat it for different numbers of trades 5,000 times and measure the profit factor each time:
| Number of trades | Lowest 5% of results | Median | Highest 5% of results | Share that look like a losing system (PF below 1) |
|---|---|---|---|---|
| 20 | 0.64 | 1.50 | 3.50 | 13% |
| 50 | 0.92 | 1.50 | 2.45 | 5.9% |
| 100 | 1.09 | 1.50 | 2.07 | 1.8% |
| 300 | 1.24 | 1.50 | 1.81 | 0.0% |
| 1000 | 1.35 | 1.50 | 1.66 | 0.0% |
With 20 trades the measured profit factor of this strategy can come out anywhere from 0.64 to 3.50, and about 13% of the time it looks like a losing system. With 100 trades the range is 1.09 to 2.07, and it takes several hundred trades before the range narrows to about 0.3 either side of the true value. A short run of good results, like the 12-trade list loaded above (4.50 on 12 trades, with a range of 1.50 to 16.50), says little.
Profit factor, win rate and payoff
For a given win rate p and payoff ratio R (average win ÷ average loss), profit factor = p × R ÷ (1 − p). The grid shows the values it takes:
| Win rate | payoff 0.5 : 1 | payoff 1 : 1 | payoff 1.5 : 1 | payoff 2 : 1 | payoff 3 : 1 |
|---|---|---|---|---|---|
| 30% | 0.21 | 0.43 | 0.64 | 0.86 | 1.29 |
| 40% | 0.33 | 0.67 | 1.00 | 1.33 | 2.00 |
| 50% | 0.50 | 1.00 | 1.50 | 2.00 | 3.00 |
| 60% | 0.75 | 1.50 | 2.25 | 3.00 | 4.50 |
| 70% | 1.17 | 2.33 | 3.50 | 4.67 | 7.00 |
Profit factor 1.0 sits on the diagonal where the win rate equals the break-even win rate for that payoff, which is also where expectancy is zero. The risk reward calculator works the break-even out in the other direction.
The same profit factor can describe very different strategies
| Win rate | Average win ÷ average loss | Profit factor | Expectancy per unit risked |
|---|---|---|---|
| 70% | 0.64 | 1.50 | +0.15 |
| 50% | 1.50 | 1.50 | +0.25 |
| 30% | 3.50 | 1.50 | +0.35 |
All three have a profit factor of 1.5, and the expectancy per unit risked is not the same. A ratio hides how big the edge is per trade, how often you win and how long the losing streaks run, so use it next to expectancy and drawdown, not instead of them. The strategy simulator shows the drawdowns and streaks a win rate and payoff produce.
What costs do to it
Costs reduce every trade by the same amount, so a thin edge disappears fast. With a 50% win rate and 1.5 payoff:
| Cost per trade (in units of the average loss) | Profit factor at 50% wins and 1.5 payoff |
|---|---|
| none | 1.50 |
| 0.1 | 1.27 |
| 0.2 | 1.08 |
| 0.3 | 0.92 |
Backtests that ignore spread, commission and slippage overstate profit factor, often by a lot on short-term strategies. Enter your realistic cost per trade above to see the profit factor you would have kept.
Next: the guide what is expectancy in trading covers the per-trade view, and the position size calculator turns a strategy into trade sizes.
The formulas
profit factor = (win rate × average win) ÷ ((1 − win rate) × average loss)
payoff ratio = average win ÷ average loss
expectancy = net result ÷ number of tradesGross loss is entered as a positive number. Break-even is a profit factor of 1. The bootstrap range re-samples your trades with replacement and takes the 5th and 95th percentiles of the profit factor, using a fixed random seed so the result is repeatable.
Worked examples
Twenty trades with one big winner
Nineteen ordinary trades (winners of 1.5R and losers of −1R) plus one 9R winner. The profit factor is 1.91 and the win rate is 45%. Without the 9R trade, which provides 43% of the profit, it is 1.09. The range from re-sampling is 0.64 to 4.75.
Forty steady trades
A 45% win rate with winners of 1.5R and losers of −1R gives a profit factor of 1.23, a positive expectancy of +0.12R per trade and no outliers (the best trade is 6% of the profit). Even so, with 40 trades the range is 0.72 to 2.03 and 22% of re-samples are below 1: forty trades are not enough to separate a thin edge from luck.
A short run that looks great
Twelve trades, nine winners of 1.5R and three losers of −1R: a 75% win rate and a profit factor of 4.50. The re-sampled range is 1.50 to 16.50. It looks excellent and proves little, because a handful of losers changes it completely.
From the totals on a statement
Gross profit of 5,000 and gross loss of 3,200 give a profit factor of 1.56 and a net of 1,800. Add 40 winning and 60 losing trades and the calculator adds a 40% win rate, a payoff ratio of 2.3 and an expectancy of 18 per trade.
Frequently asked questions
What is profit factor?
Profit factor is gross profit divided by gross loss over a set of closed trades. A value of 1 means break-even, above 1 means the winners outweighed the losers in total, and below 1 means a net loss. It is one number summarising how much you made for each unit you lost.
How do you calculate profit factor?
Add up all winning trades (gross profit), add up all losing trades as a positive number (gross loss), and divide. For a win rate p, average win W and average loss L the same figure is (p × W) ÷ ((1 − p) × L). Take costs off each trade first.
What is a good profit factor?
There is no standard. Guides often call about 1.5 to 2 solid and treat very high values as a warning sign of a small sample, an outlier or an over-fitted backtest. The better question is how many trades the number rests on: use the range in the calculator before judging it.
Is a profit factor of 1.5 good?
It means the strategy made 1.5 for every 1 lost, which can be a healthy edge. But with 20 trades a strategy whose true profit factor is 1.5 can measure anywhere from 0.64 to 3.50. Check the sample size, the costs, the effect of the best trade and the drawdown.
What is the difference between profit factor and expectancy?
Profit factor is a ratio of totals and ignores how many trades there were. Expectancy is the average result per trade, in money or in R. Two strategies can share a profit factor and have very different expectancies, so look at both.
Does profit factor include drawdown?
No. The same profit factor can come from a smooth equity curve or from a long losing streak followed by big wins. The calculator shows the longest losing streak and the worst peak-to-trough fall of your list, and the risk of ruin and drawdown calculators on this site look at the path.
A profit factor is only as good as the setups behind it.
A number can be measured. The edge behind it has to be found. These indicators help you look for setups with a consistent payoff.
Guides that explain it
Last updated November 2026. For education only. Not financial advice. Results depend on your inputs and cannot predict future performance.