Profit factor

The profit factor is gross profit divided by gross loss over a set of trades: the sum of all winning trades over the absolute sum of all losing trades. A value above one means the winners outweighed the losers in total; a value of one means break-even before any result that was not counted.

Senzoukria · Glossary · Updated September 2026

Computation

Split the trades into winners and losers. Add the net results of the winners to get gross profit. Add the absolute net results of the losers to get gross loss. Divide the first by the second. Scratches, trades that closed at zero, count in neither sum.

Because it is a ratio of sums, the profit factor is insensitive to the number of trades and to their order. A session with one large winner and many small losers can show the same value as a session with steady, evenly sized trades.

Reading it

  • Above one: the sum of the winners exceeded the sum of the losers.
  • Exactly one: winners and losers cancelled out.
  • Below one: losses outweighed gains.
  • Undefined or infinite when there was no losing trade, which says more about the sample than about the strategy.
  • The related win/loss ratio (average win over average loss) removes the effect of the win rate; the profit factor keeps it.

In Senzoukria

The Replay performance panel reports Profit factor with the hint 'Gross profit / gross loss. ∞ = no losing trade in the session.' The gross profit and gross loss lines above it are the two inputs, and the Win/loss ratio line gives the average-based variant. The desktop Welcome screen shows Profit factor as one of three summary figures with Win rate and Max drawdown.

The site's backtest page lists profit factor first among the results a run reports, with expectancy, SQN, Sharpe and drawdown. It is not an objective for the walk-forward optimiser; that choice is between expectancy, SQN and Sharpe per trade.

Common mistakes

  • Treating a high profit factor on few trades as robust. One outlier winner can carry the ratio.
  • Comparing profit factors computed before and after costs. Fees reduce gross profit and increase gross loss at the same time.
  • Using it as the only figure. It is blind to drawdown, sequence and sample size.
  • Ignoring the infinity case, which the desktop marks explicitly, instead of asking how many losing trades a realistic sample should have.

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Frequently asked questions

Is the profit factor the same as the win/loss ratio?
No. The profit factor divides the total of all winners by the total of all losers, so the number of winners and losers is built into it. The win/loss ratio divides the average winner by the average loser and ignores how many of each there were. The Replay performance panel shows both, one line apart.
What does an infinite profit factor mean?
It means the gross loss was zero: no trade in the sample lost money. The desktop displays the infinity symbol rather than a number in that case. It is a description of the sample, usually a short one, and not evidence of a strategy that does not lose.

Keep reading

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