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Profit factor calculator
Profit factor compares all winning value with the absolute value of all losing value in the same sample. It describes the balance of gains and losses; it does not show timing, drawdown, or whether one outlier produced most of the result.
Updated August 31, 2026 · Educational information onlyTHE FORMULA
Profit factor = gross profit ÷ gross loss
Enter gross loss as a positive magnitude. When gross loss is zero and gross profit is positive, the ratio is mathematically unbounded and is shown as ∞ rather than an invented number.
WORKED EXAMPLE
See how the number is produced.
If winning trades total $8,400 and losing trades total $4,000 in absolute terms, profit factor is 8,400 ÷ 4,000 = 2.10. Net P&L before any omitted costs is $4,400.
HOW TO READ IT
Interpret the result with context.
- A value above 1 means gross winning value exceeded gross losing value in the selected sample.
- A value below 1 means gross losses exceeded gross wins.
- Compare the ratio across consistent time periods and setups, then inspect the trades behind it.
COMMON MISTAKES
Keep the inputs consistent.
- Entering losses as a negative number instead of a positive magnitude.
- Mixing gross winners with fee-adjusted losers.
- Treating an infinite value from a no-loss sample as proof that risk is absent.
- Ignoring whether one unusually large winner dominates a small sample.
COMMON QUESTIONS
Profit factor calculator FAQ
What does a profit factor of 1 mean?
It means gross winning value equals the absolute gross losing value for the sample. Any costs not already included would make the net result negative.
Should fees be included?
For a net view, calculate each trade after the costs you intend to measure, then total the net winners and absolute net losers consistently.
Can profit factor predict future performance?
No. It describes a historical or hypothetical sample. Market conditions, execution, costs, and the underlying process can change.