PF is gross profit ÷ gross loss. 1.0 means break-even; the higher it is, the more efficiently profit is generated. It is one of the most important metrics for evaluating an EA.
Profit Factor (PF) is an efficiency metric equal to gross profit ÷ gross loss (absolute value).
PF = sum of winning trades ÷ | sum of losing trades |
Rules of thumb
- 1.0: profit equals loss (break-even).
- 1.3–2.0: generally considered good.
- Above 2.0: excellent — but it must be backed by enough trades and time.
- Below 1.0: net loss.
How to read it
- It is inflated when there are few trades. PF over a few dozen trades is dominated by luck; it stabilizes over hundreds.
- Averaging/martingale types tend to show a high PF temporarily — they may only capture the "calm period" before a large floating loss is realized. Always read it with max drawdown.
- Compare over the same period and symbol. PF changes with market regime (see how to compare).
- Not enough on its own — combine with expectancy and recovery factor.
