Gross profit ÷ gross loss, honestly framed.
A profit factor describes a past sample only. Below ~30–100 trades it is dominated by luck.
Educational tool only — not financial advice. Verify figures with your broker.
The Profit Factor Calculator divides the total money your winning trades made by the total your losing trades lost, producing a single ratio that summarizes a past sample. It answers: for this set of trades, how many dollars of gross profit came for every dollar of gross loss? It describes history only — it does not certify a system as tradeable.
Profit factor = gross profit ÷ gross loss, where gross profit is the sum of all winning trades and gross loss is the sum (as a positive number) of all losing trades. Net profit is gross profit minus gross loss, and 'losses per $1 of gross profit' is simply gross loss ÷ gross profit — the inverse of the profit factor.
A profit factor above 1 means a sample made more than it lost, and many traders treat figures in the 1.3–2 range as respectable, but a profit factor calculator only describes the trades you fed it — it is not a guarantee. Very high numbers on few trades usually reflect luck rather than edge.
Exactly 1.0 means gross profits and gross losses were equal, so the sample broke even before considering costs and effort. Below 1.0 the sample lost money overall.
Below roughly 30–100 trades the ratio is dominated by luck and can swing wildly from a single outlier. The larger and more varied the sample, the more the number reflects the process rather than chance.
Keep in mind: A profit factor describes a past sample only, and below roughly 30–100 trades it is dominated by luck rather than any real edge. A high number can come from one lucky outlier and says nothing about whether the same result will repeat live.