Profit Factor
Gross profits divided by gross losses — how many dollars came in per dollar that went out.
What it means
Sum every winning trade; sum every losing trade; divide. A profit factor of 1.0 is breakeven, 1.5 means $1.50 earned per $1 lost. Because it uses totals, it blends win rate and win size into one robust-ish figure of merit.
Two cautions: a few outlier winners can carry the whole number (recompute with the best trades trimmed to see if the edge survives), and untradeably-thin samples make any value meaningless. As a rough intraday yardstick, sustained values above ~1.3 on healthy trade counts deserve attention.
Why traders care
- One number that punishes both frequent small bleeds and rare disasters.
- Trimmed recomputation is a fast outlier-dependence test.
Related terms
Educational content, not investment advice. Engine details describe how TraderWe computes this value; other platforms may define it differently.