Home/Tag: Trading Systems Evaluation

How to calculate the mathematical expectation of a trading system

2020-12-29T18:58:44+00:00By |Categories: Trading Systems|Tags: , |

Calculating the mathematical expectation of a trading system is one of the first things that should be done to know if the system is capable of making money in the long term. Having a positive mathematical expectation is an indispensable condition that any moderately reliable system must meet. The mathematical expectation measures the amount that [...]

How to Measure a Trading System? – Ratios to assess your performance and risk

2020-12-29T19:04:04+00:00By |Categories: Forex Education, Trading Systems|Tags: , |

When you design a trading system, or you are looking to buy an automatic robot on the market, you must make decisions according to your preferences. The first thing you should ask yourself is: what am I looking for? It is clear that you are looking to earn a lot of money, yes… this is [...]

Calculate the risk of ruin (or probability of success) of a trading system

2020-09-23T01:34:36+00:00By |Categories: Forex Education|Tags: , |

  This is probably one of the most important articles for long-term success in trading that I have written so far. If I am not mistaken, this is the first time I have written about it, although the issue of risk of ruin is of the utmost importance in achieving long-term profitability. It is about [...]

The Calmar Ratio – Profitability and Risk Indicator

2020-06-03T05:35:24+00:00By |Categories: Forex Education, Trading Systems|Tags: |

The Calmar Ratio is an indicator that is designed to measure and compare the performance of an investment portfolio or trading system. The interesting thing about this ratio is that it summarizes how the profitability of the period has been with respect to the assumed risk. Although it is a less known indicator than the [...]

The Sortino Ratio – good and bad volatility in your investments

2020-06-03T19:02:48+00:00By |Categories: Forex Education, Trading Systems|Tags: , |

To correctly analyze the performance of investments in the stock market and other financial markets, it is always advisable to relate profitability with respect to risk. One of the most used ratios for this is the Sharpe ratio. But today we will see that it is possible to further refine this measure using the Sortino [...]

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