Gain-to-pain ratio (GPR) = sum of monthly returns / absolute sum of negative monthly returns. Popularized by Jack Schwager in the Market Wizards interviews as the single metric that actually maps to how funds get evaluated by allocators.
Conceptually it's profit factor applied to monthly returns rather than per-trade P&L. Above 1.0 means your aggregate gains exceed your aggregate losses; above 2.0 is a real edge worth allocating to; above 3.0 is exceptional and almost always small-sample.
Why it beats profit factor for portfolio-level evaluation: profit factor is sensitive to outlier trades that can swing the number by 30% in either direction. Monthly returns smooth the trade-level noise into a more stable distribution, so GPR captures sustained edge rather than a couple of fortunate trades.
The catch is the same as every drawdown-adjacent metric — GPR is only as honest as the worst month in your sample. Most retail journals haven't lived through a regime change where their strategy stopped working for 4-6 months consecutively; their reported GPR is computed on an upward-biased window. When evaluating someone else's track record, ask what the worst quarter looked like before you trust the headline number.