WickCheck / Trading school / Profit factor
Profit factorPFIntermediate
Gross profit divided by gross loss. Above 1 made money, below 1 lost money.
What it means
PF 1.5 means every 1 lost was matched by 1.5 won. After costs, many popular strategies land between 0.9 and 1.1, which is break-even. Anything well above 1.3 on a large sample is worth a closer look.
How to spot it
- Total of all winning trades ÷ total of all losing trades.
Common mistakes
- Trusting a high PF from 15 trades. Sample size matters.
Related terms
ExpectancyThe average result per trade, usually in R. Positive expectancy means the strate…Win rateThe share of trades that make money.…Sample sizeHow many trades a result is based on. Small samples can look great or terrible b…
Why most strategies need a human behind the screen
Read the lessonWhat a mechanical test can and cannot tell you about smart money concepts.
Education only, not financial advice. Definitions vary between teachers; these are ours, written for clarity.