Profit factor is gross profit divided by gross loss across a set of trades. A value above 1.0 means the strategy is net profitable, and above roughly 1.5 suggests a genuine, durable edge. It is one of the simplest single numbers for judging whether a strategy actually works.
This term belongs to Risk & statistics. See how it fits the bigger picture in The Money, part of the free DEGEN ACADEMY — or watch it play out on the live terminal.
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FAQ
What is Profit factor?
Profit factor is gross profit divided by gross loss across a set of trades. A value above 1.0 means the strategy is net profitable, and above roughly 1.5 suggests a genuine, durable edge. It is one of the simplest single numbers for judging whether a strategy actually works.