Profit Factor

Profit factor is the ratio of gross profit to gross loss over a series of trades — a profit factor of 1.5 means a strategy made $1.50 for every $1 it lost across all trades. A profit factor above 1 indicates overall profitability, while a value at or below 1 means the losses equal or outweigh the gains. It's a standard metric on any backtest or trading-journal summary, usually reviewed alongside win rate and maximum drawdown to judge whether a strategy's edge is real and its risk is tolerable.