Profit factor: what it is and what a good value looks like
Profit factor answers one question: how many dollars do you earn for every dollar you lose? It is one of the most useful single numbers in a trading journal.
The formula
Profit factor = sum of all profits ÷ sum of all losses (taken as a positive number), over the same period.
Example: winning trades brought 4,200, losing trades lost 3,000. Profit factor = 4,200 / 3,000 = 1.4 — you earn 1.40 for every 1.00 lost.
How to read it
- Below 1 — the strategy loses money.
- 1.0–1.2 — close to break-even; fees, funding or a few bad trades can flip it.
- 1.3–2.0 — a healthy edge for most active traders.
- Above 2–3 on many trades — very strong; on few trades usually just luck.
Profit factor, win rate and R:R
Profit factor combines both: it equals (win rate × average win) ÷ (loss rate × average loss). That is why it is a better “single number” than win rate — it can’t be high when losses are much bigger than wins.
See these numbers for your own trades
Connect an exchange and your trades load automatically — PnL, fees and funding per trade. The demo works without signing up.
Common mistakes
- Counting price PnL instead of net PnL. Fees and funding often turn 1.2 into 1.0.
- Too few trades. On 15 trades one lucky trade can make it 3.0.
- One-sided filters. If you look only at winning trades, profit factor is infinite; only at losing ones — zero. It only makes sense over all trades of a period.
In CheckMyProfit
Profit factor is on the dashboard and in analytics, calculated from net results with fees and funding, for any period, exchange or coin — and as a breakdown by setup tag, to see which setups actually carry the account.