MSJ Guides ←ARTICLE NO. 03 | PUBLISHED: July 22, 2026
Win Rate and Profit Factor: Calculation & Interpretation
Win rate alone does not define system quality. Read it alongside win size, loss size, Profit Factor and an adequate sample.
Win-rate formula
Excluding break-even trades, divide wins by wins plus losses. A low-win-rate strategy can still be profitable when average winners are sufficiently larger than losses.
Profit Factor formula
Divide gross profit by the absolute value of gross loss. Above one means gross profit exceeded gross loss, but a small sample can be misleading.
Professional interpretation
Break metrics down by strategy, instrument, weekday and period. Look for repeatable strengths or correctable weaknesses rather than judging a handful of trades.