A good profit factor in trading is generally 1.25 or above. A profit factor of 1.0 means breakeven before costs. Anything below 1.0 means the strategy lost more than it made over the measured sample.
Profit factor is calculated by dividing gross profits by gross losses. A result of 1.50 means the strategy generated $1.50 for every $1.00 lost. However, sample size matters more than the number itself — a profit factor of 3.0 across 10 trades is far less meaningful than 1.55 across 500 trades.
A stable profit factor that holds up across your last 25, 50, 100, and all-time trades is more useful than a single impressive number from a small sample.
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