What Is a Good Profit Factor in Trading? Kingdom Hunter Gold's 4.39 Across 7,359 Tester Trades
What is a good profit factor in trading? There is no official cutoff, and the number on its own tells only part of the story. A profit factor becomes useful when you read it next to two other figures: how many trades produced it, and how deep the equity drawdown went. Kingdom Hunter Gold's published backtest shows all three together: profit factor 4.39 across 7,359 trades, with a maximum equity drawdown of 33.08% (XAUUSD H1, $3,000 deposit, 2018.01.01 to 2026.08.26).
WHAT PROFIT FACTOR MEASURES
Profit factor is the gross profit of a test divided by its gross loss. At 1.0 the two are equal; above 1.0, the closed trades earned more than they gave back. An illustration with round numbers: closed trades that earn $6,000 in gross profit and give back $2,000 have a profit factor of 3.0.
Every Strategy Tester report in MetaTrader 5 lists the profit factor among its summary figures, which is why it shows up in so many EA descriptions.
WHY THERE IS NO MAGIC NUMBER
A profit factor depends on how a strategy trades. A system that takes many modest profits and a system that waits for a few large ones can both work well at very different values, so one threshold for every EA does not exist.
What a higher profit factor does give you is room. Every trade pays the spread, and many accounts pay a commission as well; a higher ratio leaves more space for those costs. The better question is therefore not whether a given profit factor is good, but what else the report shows next to it.
THE FIRST NUMBER BESIDE IT: TRADES
A profit factor built on a small sample can move a long way with the next trade. Across thousands of trades, any single trade carries very little weight, so the figure says more about the strategy and less about chance. Kingdom Hunter Gold's published profit factor comes from 7,359 trades taken between January 2018 and August 2026 on the H1 chart of XAUUSD.
THE SECOND NUMBER BESIDE IT: EQUITY DRAWDOWN
Profit factor is calculated from closed trades. The maximum equity drawdown completes the picture, because equity includes positions that have not been closed yet. MetaTrader 5 defines it as the largest fall from an equity high to the next low. In Kingdom Hunter Gold's published backtest it is 33.08%, and that figure belongs next to the 4.39 whenever the profit factor is quoted. The report offers one more pairing, the recovery factor, which divides the net profit by the maximum drawdown: 4.61 in the same backtest.
READ ALL THREE IN YOUR OWN REPORT
You can see these numbers in a report of your own. Download Kingdom Hunter Gold's free demo from the product page, open the Strategy Tester and enter the recipe printed there: XAUUSD on H1, the dates 2018.01.01 to 2026.08.26, the tick model set to "Every tick based on real ticks", a deposit of 3,000 USD, leverage 1:100 and the EA's default settings. Its published figures were produced on IC Markets price data; on another broker's price history, the numbers can come out differently.
Then read the summary in this order:
1. Is the profit factor above 1.0? The published run shows 4.39.
2. Are there enough trades behind it? The published run has 7,359.
3. Does the maximum equity drawdown fit the risk you are prepared to take? The published run shows 33.08%.
4. Does the recovery factor support the picture? The published run shows 4.61.
The same four questions work for any backtest report you read.
YOUR TURN
The free demo runs the complete published test in the Strategy Tester, so you can read these numbers in your own report before any purchase:
https://www.mql5.com/en/market/product/193298
A real account running the same EA is public on MQL5 Signals for verification:
https://www.mql5.com/en/signals/2389088
Kings promise. Knights deliver.
Risk warning: trading gold with leverage involves substantial risk. Every number in this post comes from a Strategy Tester backtest at the settings shown, not from live trading. Past results, tested or live, are no guarantee of future results.
