Formula
Profit factor = Total winning trade profits / Total losing trade losses (absolute values).
If an EA earned $8,000 in winning trades and lost $4,000 in losing trades, profit factor = 2.0.
Benchmarks
- Below 1.0: losing strategy
- 1.0-1.3: marginally profitable, likely too close to breakeven after costs
- 1.3-1.8: decent
- 1.8-2.5: strong
- Above 2.5: excellent — but verify it is not the result of overfitting
What profit factor hides
A profit factor of 2.0 is consistent with both “100 small wins and 1 large loss” and “10 large wins and 100 small losses.” Use alongside win rate and RR ratio for a complete picture.