Profit Factor Calculator
The single most important metric when evaluating a trading strategy. Enter your trade history and see if your system is worth running live.
Based on historical trade data. Use at least 30–50 trades for a statistically meaningful profit factor.
What is profit factor and why is 1.5 the minimum?
Profit factor is the ratio of gross profit to gross loss across all trades. A profit factor of 1.5 means for every $1 lost, the strategy makes $1.50. It is the single most used metric in strategy evaluation because it captures both win rate and trade sizing in one number.
How to read the number
- Below 1.0 — Strategy loses money. Do not trade live.
- 1.0–1.5 — Marginal. Costs and slippage will likely make it unprofitable live.
- 1.5–2.0 — Good. Sufficient buffer for real-world trading costs.
- Above 2.0 — Excellent. Either a strong edge or insufficient sample size — verify with more data.
Why you need at least 50–100 trades
With 10 trades, a profit factor of 3.0 means almost nothing. With 200 trades, it carries statistical weight. Prop firms and hedge funds typically require at least 6 months of verified live data before drawing conclusions about a strategy.
Profit factor vs expectancy
Profit factor and expectancy measure similar things but are expressed differently. Profit factor is a ratio (dimensionless). Expectancy is in dollars per trade. Both should be positive for a viable strategy — this calculator shows you both.