Lost money on tips? Profit factor is the one number that beats any screenshot

10 September 2026 · AlgoRishi

Somebody in a Telegram group sends you a screenshot. One trade, ₹42,000 profit, green everywhere. It looks like proof. It is not proof of anything at all.

There is a single number that tells you far more than any screenshot ever will, and it takes about thirty seconds to calculate. It is called the profit factor.

1.00break-even line

₹ in ÷ ₹ outthe whole formula

1screenshots it needs

The formula

Take every trade you have made over a period. Add up the money from all the winners. That is your gross profit. Add up the money lost on all the losers, as a positive number. That is your gross loss.

Profit factor = gross profit ÷ gross loss.

That is it. No software needed. A spreadsheet column and a division.

A worked example on SENSEX weeklies

Say you took ten trades on SENSEX weekly options over two expiries. Four made money, six lost money.

	Count	Total
Winners	4	₹80,000
Losers	6	₹50,000

Gross profit ₹80,000 ÷ gross loss ₹50,000 = profit factor 1.60.

Notice what just happened. This trader lost on 60% of their trades. Their win rate is a miserable-sounding 40%. And yet for every ₹100 the market took from them, they took ₹160 back. The screenshot culture would call this trader a failure. The arithmetic calls them profitable.

Profit factor above 1.00 means the winners outweighed the losers over that set of trades. Below 1.00 means the opposite. Exactly 1.00 means you did a lot of work, paid a lot of brokerage, and ended where you started.

Why a screenshot cannot do this job

A screenshot is one row out of a table. Profit factor is the whole table.

Any account that moves up and down contains a rising stretch. Cropping to that stretch tells you nothing about the account. Profit factor refuses to crop.

Every trading account that is not a flat line contains some window where things went well. Pick your window carefully enough and you can make almost any account look like a machine. That is why a screenshot is not evidence — the person choosing the crop is the person being evaluated.

The street food test

Think of a vada pav stall. The owner does not judge the business on the day a college group turned up and bought forty plates. He knows the number that matters: total money taken in over the month, divided by total money spent on potatoes, pav, oil, gas and rent.

If that ratio is 1.60, the stall works. If it is 0.85, the stall is quietly eating his savings no matter how many good afternoons he can remember. Trading is the same business with a worse memory — the good afternoons are the ones we screenshot, and the bad ones are the ones we scroll past.

Reading it honestly

A profit factor is only as good as the set of trades behind it. Four things decide whether it means anything.

Sample size. A profit factor over 8 trades is a rumour. Over 100 trades it starts to be a description. Over 300 it is worth arguing about.
Costs included. Brokerage, STT, exchange charges and GST are real money leaving the account. A profit factor calculated on gross prices before costs is a fantasy number, and on SENSEX weeklies with a lot of 20 and strikes every 100 points, an active trader's costs are not small.
The period. A number measured only across a trending fortnight will collapse in a sideways one. Ask which weeks are in there — including expiry Thursdays, which behave nothing like a Monday.
One trade doing all the work. If a single monster winner supplies most of the gross profit, remove it and recalculate. If the number falls below 1.00 without that one trade, you have measured luck, not method.

Profit factor says nothing about how much pain you went through to get it. Two accounts can both show 1.40 while one drifted up gently and the other went 30% underwater first. Pair it with your largest drawdown, or you are only reading half the story.

Do it on your own book tonight

Export your trades from your broker. Two columns: date and realised P&L. Sum the positive numbers. Sum the negative numbers and drop the minus sign. Divide the first by the second.

Whatever comes out is the honest version of your trading. If it is below 1.00, no screenshot from your best week changes that. If it is above 1.00, you already have something worth measuring properly — and you never needed anyone else's green screenshot to tell you so.

Do the same calculation on anyone who wants your money or your attention. Ask for the profit factor, the number of trades, the date range and whether costs are included. Four questions. Most sources of "tips" cannot answer any of them.

Disclosure: AlgoRishi publishes signal tracking on real market prices using virtual capital, for information and education only. Nothing here is investment advice or a recommendation to trade. Futures & options trading involves substantial risk of loss. Past performance is not indicative of future results. AlgoRishi is not a SEBI-registered investment adviser or research analyst.