Profit Factor
Profit factor is the ratio of gross profit to gross loss over a series of trades. A profit factor above 1.0 means the strategy is profitable; above 1.5 is considered solid; above 2.0 is excellent.
Formula
Example: If your total winning trades earned $5,000 and your total losing trades lost $2,500, your profit factor is 2.0.
Why it matters for traders
Profit factor is one of the most important metrics for evaluating a trading strategy. Unlike win rate alone, it accounts for the size of wins and losses — a 40% win rate can be highly profitable with a high profit factor.
How Tradapt tracks this
Tradapt calculates your profit factor automatically from your trade history and breaks it down by setup, session, and time period. Use the Playbook to see which setups have the strongest profit factor.
Track this free in TradaptFrequently asked questions
What is a good profit factor?
A profit factor above 1.5 is generally considered solid for a trading strategy. Above 2.0 is excellent. Below 1.0 means the strategy is losing money overall.
What is the difference between profit factor and win rate?
Win rate only measures how often you win. Profit factor measures whether the total gains outweigh the total losses. A 40% win rate with large winners can produce a profit factor above 2.0.