Profit factor
Profit factor is your total winnings divided by your total losses. Above 1.0 you made money, below 1.0 you lost it, and 2.0 means you won two dollars for every one lost.
In depth
Add up every winning trade, add up every losing trade, then divide. Win 10,000 dollars in total and lose 5,000, and your profit factor is 2.0. Win 6,000 and lose 6,000 and it is 1.0, which is a lot of work for nothing.
The number is useful because it does not care how often you were right. A trader who wins four times out of ten can sit above 2.0 if the winners are much larger. A trader who wins seven times out of ten can sit below 1.0 if one loss wipes out a week. Read it next to win rate, never on its own, and give it a few dozen trades before you believe it.
Why it matters
A win rate can look great while the account shrinks. Profit factor catches that in one number. At 0.9, every dollar you lose is covered by only ninety cents of wins, no matter how many green days the calendar shows. It also tells you whether one outsized loss, rather than the strategy, is the problem.
TraderLog works out profit factor from your imported fills and puts it on the stats page beside win rate, average winner, average loser and expectancy. Per-trade tags let you compare the number across your setups in a By tag table.
Frequently asked questions
Above 1.0 means you are making money. Around 1.5 to 2.0 is solid for an active trader.
Only if your records do. Import your fills with fees included, or the number will flatter you.
Keep your Profit factor trades on the record in TraderLog
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