Profit factor
Gross profit divided by gross loss. 1 is breakeven, above 1.5 is considered healthy, above 2 strong; very high values raise suspicion of overfitting.
Profit factor is another way of expressing expectancy and is standard in backtest reports. With costs included, 1.3-1.8 is a realistic range.
Don't rely on a single metric: profit factor, maximum drawdown, number of trades and longest losing streak are judged together.
Related terms
Where it appears in the guides
Guides whose text uses this term; most frequent first.
- Performans metrikleri: kazanma oranı, profit factor, SharpeStrategy & backtesting
- Algoritmik trading'e giriş: Python ile ilk adımlarTrading systems & data
- Aşırı uyum (overfitting) ve sağlamlık testleriStrategy & backtesting
- Backtest: veri, örneklem büyüklüğü ve hatalarStrategy & backtesting
- İleri test (forward test) ve demo dönemiStrategy & backtesting
- İşlem günlüğü araçlarıPlatforms & tools