To calculate Profit Factor, you need to have the data of all the trades that your system generated over a certain period of time. You can use a spreadsheet or a trading software to do this. The formula for Profit Factor is: Profit Factor = Total Gross Profit / Total Gross Loss You can also calculate the Profit Factor for each trade by dividing the profit or loss of that trade by the maximum possible loss of that trade. This is called the Risk-Reward Ratio (RRR) of the trade. For example, if you enter a trade with a $100 risk and a $200 profit potential, and you exit with a $150 profit, your RRR is 1.5.

Profit Factor of 1.6 and above is considered very good.