Profit factor calculator
Profit factor is gross profit divided by gross loss across a set of closed trades, both taken as positive totals. A record with 8,000 of gross profit and 5,000 of gross loss has a profit factor of 1.60. A value above 1.00 means the wins outweighed the losses over that period; a value of exactly 1.00 is level before any costs not already included.
Calculate
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The formula
profit factor = gross profit ÷ gross loss
Gross loss is taken as a magnitude, so entering it negative gives the same answer. Only a gross loss of zero is undefined — a gross profit of zero is a perfectly valid 0.00.
Worked example
A record with 8,000 gross profit and 5,000 gross loss:
- gross profit = 8000
- gross loss = 5000
- 8000 ÷ 5000 = 1.60 profit factor
Illustrative figures, not a result from any account.
Reading the number honestly
A profit factor of 1.00 is the breakeven line. Below it the losing trades outweighed the winning ones over the period measured. Above it they did not. That is the entire claim the number supports.
Published thresholds for what counts as a strong profit factor vary widely between sources and none of them is a standard, so none is quoted here. The figure is also unstable on small samples and highly sensitive to a single large result: one outsized win can lift it substantially without anything about the record having changed.
What profit factor does not tell you
- Nothing about drawdown. Two records with identical profit factors can have very different worst losing runs.
- Nothing about how the total was reached. One very large win can carry the figure on its own.
- Nothing about the period. A profit factor over a strong month and one over a full year are not comparable.
- Nothing about costs, unless the totals entered already have them deducted.
Questions
What is a good profit factor?
There is no agreed threshold, and figures quoted as standards differ substantially between sources, so this page does not quote one. What the number states plainly is whether gross profit exceeded gross loss over the period measured — above 1.00 it did.
Why is my result undefined?
Because gross loss is zero, and dividing by zero has no value. A record with no losing trades at all usually means the sample is very small or the losses have not been included.
Should gross loss be entered as a negative number?
Either way works. The calculator takes the magnitude, so −5000 and 5000 give the same result. Only the sign of gross profit is checked, because a negative gross profit means the two fields have been swapped.
Does profit factor account for costs?
Only if the totals entered already have spread, commission and swap deducted. The calculator cannot tell whether they do, and the difference between gross and net can move the figure across the 1.00 line.
Related
Expectancy calculator — Expectancy expresses the same balance as an average per trade rather than a ratio of totals.
GoldenRock Analyser — computes this metric from recorded MT4 and MT5 trading history rather than from figures typed by hand. GoldenRock Analyser is an authenticated GoldenRock feature currently not enabled for general public access.
Position sizing and risk management — the decision this arithmetic does not make for you.
Risk disclosure — educational content only, not investment advice.