Gain-to-Pain Ratio
A metric popularized by Jack Schwager measuring net profit relative to total losses, indicating return consistency.
Formula
More Details
Detailed Analysis: Gain-to-Pain Ratio
Popularized by Jack Schwager in Market Wizards, the Gain-to-Pain ratio is an excellent risk-adjusted return metric. Unlike some ratios that penalize upside volatility (big winning months increase standard deviation), the Gain-to-Pain ratio only penalizes downside volatility (losses).
Formula
GPR = (Total Profit + Total Loss) / Abs(Total Loss)
Where Total Loss is already negative, so this effectively calculates Net Profit / Abs(Total Loss).
Interpretation
| GPR | Meaning |
|---|---|
| > 1.0 | Good - making more than losing |
| > 1.5 | Excellent - typical of high-performing traders |
| > 2.0 | Superb - very smooth equity curve |
| < 1.0 | Poor - losses exceed gains |
| 0 | Breakeven |
Psychological Analysis
This metric is particularly useful for psychological analysis. A high Gain-to-Pain ratio means the trader doesn't have to "suffer" much (via drawdowns) to achieve their returns.
GPR vs Profit Factor
| Metric | Formula | Focus |
|---|---|---|
| Profit Factor | Profit / Loss | Absolute efficiency |
| Gain-to-Pain | Net Profit / Loss | Net result relative to pain |
GPR of 2.0 means your net profit equals twice your total losses.
TradesViz Implementation
TradesViz provides a trade-by-trade version of the Gain-to-Pain ratio, offering a granular view of consistency often missed by monthly aggregate stats. This is calculated as shown in the formula above using your actual trade profits and losses.
Where to find it in TradesViz
Example
With 10,000 total profit and -4,000 total loss: GPR = (10,000 + (-4,000)) / 4,000 = 1.5