Method
Profit factor and win rate: calculate them together
Profit factor is the sum of positive results divided by the absolute sum of negative results. Win rate measures how often trades win. Compare these metrics for the same period, currency and set of closed trades with known P&L.
- Define the sample first
- Read profit factor
- Handle samples without losses
- Examine the distribution
- Frequently asked questions
Define the sample first
Fillnovo uses closed trades with known P&L. Zero-result trades count as neither wins nor losses for win rate. Check period, account and strategy filters before comparing results.
Read profit factor
A profit factor of 2 means cumulative gains are twice cumulative losses in the selected sample. It does not mean each trade earns twice its risk or that the next period will be profitable.
Handle samples without losses
Without losses, the denominator is zero and no finite ratio can be calculated. This does not demonstrate robustness. Examine the number of trades, observation period and market conditions.
Examine the distribution
One large gain can hide many losses. Also examine the average result, worst trade, fees and drawdown. Compare well-documented samples rather than a single isolated number.
Verification example
| Closed trade | Known net result |
|---|---|
| A | +120 USD |
| B | +80 USD |
| C | −50 USD |
| D | −50 USD |
Gains: 200 USD; losses: 100 USD; profit factor: 2; win rate: 2/4 = 50%; total result: 100 USD; average: 25 USD per trade.
Frequently asked questions
Is a high win rate enough?
No. A few large losses can erase frequent small wins. Gain and loss sizes and fees matter too.
Which profit factor guarantees a good strategy?
No threshold guarantees future results. The ratio depends on the sample, costs, filters and data quality.