Profit Factor
Gross profits divided by gross losses. Above 1.0 is profitable; above 1.5 is healthy; above 2.0 is excellent.
In Depth
Profit Factor is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding profit factor is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, profit factor connects to Sharpe Ratio, Win Rate, Expectancy. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Sharpe Ratio
analysisRisk-adjusted return metric. Excess return divided by volatility. Above 1.0 is good; above 3.0 is excellent.
Win Rate
analysisPercentage of profitable trades. High win rate alone does not guarantee profitability — depends on win/loss size ratio.
Expectancy
analysisAverage expected profit per trade: (win rate x avg win) - (loss rate x avg loss). Must be positive for viable strategy.
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