Gross profit divided by gross loss — profit factor compresses win rate, payoff size and loss control into a single number you can improve deliberately.
At the live tables
Free-play chips only. No real money.
Add up every dollar your trades made. Add up every dollar they lost. Divide the first by the second. That's profit factor — and it answers the only question that matters about a system: for each dollar you risk losing, how much do you reliably make back? It exposes systems that win often but small, and systems that lose often but win big, better than any win-rate statistic.
Profit factor is a useful review metric, not proof of a durable edge. Compare gross gains and losses over a meaningful sample, account for costs, and pair the ratio with R-multiples to see whether position sizing is consistent.
Profit factor = gross profit ÷ gross loss. Ten trades win $4,000 total; ten trades lose $2,000 total. Profit factor = 4,000 ÷ 2,000 = 2.0. Above 1.0 you're net profitable; the ratio says by how much per dollar lost.
Below 1.0: the system loses. 1.0–1.5: thin edge — costs and slippage can erase it. 1.5–2.0: healthy, tradeable edge. Above 2.0: excellent, but be suspicious of backtests showing 3.0+ — that usually means curve-fitting, not skill.
Same winners, but disciplined stops shrink gross loss from $2,000 to $1,400: profit factor jumps from 2.0 to 2.9 without a single better entry. Most traders chase bigger wins; the pros shrink the losses.
Three trades tell you nothing — a 3.0 profit factor on 3 trades is noise. Judge the ratio over at least 30–50 trades so a lucky streak can't masquerade as an edge. R-multiple logs make this easy to track honestly.
Poker hands teach the same arithmetic: folding bad hands is loss control, betting strong hands is profit growth, and your session review is the ratio itself. See it in risk units with R-multiples, or play a free session and check your own numbers.