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Win Rate vs Profit Factor: Which Numbers Actually Matter

A high win rate feels good, but it won't tell you whether you're making money. Here's how win rate, average win and loss, profit factor and expectancy fit together.

Written By

Karolina Hansen

Updated 26/10/2026 · 5 min read

ForexGold

Key Takeaways

Win rate on its own can't tell you whether you're profitable.
Profit factor is gross profit divided by gross loss. Above 1 means you made more than you lost over that sample.
Expectancy is your average result per trade. It takes your win rate and the size of your wins and losses together.
A 70% win rate can lose money and a 35% win rate can make it. The difference is the size of the average win against the average loss.

Win rate is the number most traders quote first. It's easy to understand and it's nice to look at when it's high. All it counts, though, is how often you win. It says nothing about how much. Win small and lose big and you can have a win rate to brag about and an account that keeps shrinking. You need a few more numbers to see what's really going on. They're simpler than they sound.

The Five Numbers in a Results Summary

Number	How it is worked out	What it tells you
Net result	Gross profit − gross loss	Whether you made or lost money overall
Win rate	Winning trades ÷ all trades	How often you win
Average win / loss	Total won ÷ winners, and total lost ÷ losers	How much a typical win and loss are worth
Profit factor	Gross profit ÷ gross loss	How many dollars you made for each dollar lost
Expectancy	(Win rate × avg win) − (loss rate × avg loss)	The average $ result per trade

Gross profit is the total of all winning trades. Gross loss is the total of all losing trades, written as a positive number. Loss rate is just 1 minus the win rate.

Two Accounts, Two Surprises

Here are two illustrative accounts trading gold, 100 trades each. The figures are in US dollars and made up to show how the numbers work.

Account A

70% win rate

70 wins × $50 = $3,500 gross profit
30 losses × $150 = $4,500 gross loss
Net result: $3,500 − $4,500 = −$1,000
Profit factor: $3,500 ÷ $4,500 = 0.78
Expectancy: (0.70 × $50) − (0.30 × $150) = −$10 per trade

Best for: Wins often, still loses

Account B

35% win rate

35 wins × $240 = $8,400 gross profit
65 losses × $80 = $5,200 gross loss
Net result: $8,400 − $5,200 = +$3,200
Profit factor: $8,400 ÷ $5,200 = 1.62
Expectancy: (0.35 × $240) − (0.65 × $80) = +$32 per trade

Best for: Loses often, still profitable

Illustrative example: net result over 100 trades

Account A · 70% win rate−$1,000

Account B · 35% win rate+$3,200

Illustrative example for education, in US dollars. Not a performance claim.

Illustrative example: gross profit vs gross loss

Account A · gross profit+$3,500

Account A · gross loss−$4,500

Account B · gross profit+$8,400

Account B · gross loss−$5,200

Illustrative example for education, in US dollars. Profit factor = gross profit ÷ gross loss.

Account A's average loss is three times its average win, so it has to win far more than 70% of the time just to break even. Account B is the other way round. Its average win is three times its average loss, which means it can afford to lose most of its trades. On win rate alone you'd pick A. Every other number says B.

The Win Rate You Need Depends on Your Reward

If your average win is a multiple of your average loss, you can work out the win rate you need to break even with 1 ÷ (1 + reward-to-risk). So if your wins are twice the size of your losses, that's 1 ÷ (1 + 2) = 33.3%.

Break-even win rate by average win ÷ average loss

0.5 (wins half the size of losses)66.7%

1 (wins and losses the same size)50%

233.3%

325%

Worked from the formula 1 ÷ (1 + ratio), before trading costs. Costs such as spread and commission raise the break-even win rate.

A bigger reward isn't automatically better. A target further away gets hit less often, so your win rate usually drops as your reward goes up. Your journal will show you where the two balance out for you.

How to Read Your Own Summary

Start with net result

Did you make or lose money over the period? The rest of the numbers explain why.

Compare average win and loss

If your average loss is bigger than your average win, you need a high win rate just to stand still.

Check profit factor

Under 1, you lost more than you made in this sample. Over 1, you made more than you lost.

Use expectancy to compare

Average result per trade lets you put different periods, setups or markets side by side.

Mind the sample size

Twenty trades can fool you. Judge these numbers over a few dozen trades at least.

Win rate tells you how often. Average win and loss tell you how much. Look at one without the other and you're guessing.

Your TradersGrowth Journal shows all of these on the Performance card (net result, win rate, average win and loss, profit factor and expectancy) for whatever period you pick.

Look past your win rate and see what your trades are really worth on average.

Open Your Journal

Frequently Asked Questions

There isn't one target for everyone. Above 1 means you made more than you lost over that sample, and below 1 means the opposite. What counts as good depends on your strategy, your costs and how many trades you're looking at.

No. A high win rate is fine as long as your average loss isn't so big that it wipes out the wins. Just never look at it without your average win and loss next to it.

Expectancy is the average result per trade, in dollars. Profit factor is a ratio of total wins to total losses. They point the same way, so positive expectancy goes with a profit factor above 1.

Educational content only, not financial advice. Examples are illustrative. Trading involves risk, and past performance does not guarantee future results.

Continue learning

Price Action Trading: Reading the Chart Without IndicatorsThe basics of price action trading. How to read the market without indicators and base your decisions on what price is actually doing.

Also worth reading: Risk Management Basics: Decide What You Can Lose Before You Trade · What Is Liquidity in Trading?