Expectancy Metrics
Profit Factor & Analytics Calculator
Measure strategy efficiency. Learn how to calculate profit factor to verify your statistical trading edge.
01. The Math of Profit Factor
Profit Factor is calculated as: Gross Profits / Gross Losses. A profit factor below 1.0 means the strategy is losing money overall.
02. Target Benchmarks in Strategy Design
During backtests, target a profit factor of 1.6 to 2.2. Extremely high profit factors (above 3.0) over large samples are rare and suggest curve-fitting.
03. Integrated Analytics Metrics
Track profit factors alongside win rates and maximum drawdowns in the analytics dashboard to evaluate strategy performance.