The Best Algo Trading Metric that'll Change Your TRADING Game! [for HIGHER PERFORMANCE Trades] 🤑

[@Penfold__]

This is useful Kevin, Many thanks.

[@AlgoTradingWithKevinDavey]

Glad it was helpful!

[@avben8709]

thanks. It definitely points me in the right direction.

[@AlgoTradingWithKevinDavey]

Glad to hear it!

[@jeroencommandeur]

Good one Kevin, thanks! Also, since you asked: I am beginning to like the Sortino ratio more and more.

[@AlgoTradingWithKevinDavey]

Good choice!

[@Jock-a-m0]

Sharpe Ratio will also help identify this in your equity curve.

[@AlgoTradingWithKevinDavey]

Sharpe is a relative to this, thanks for the comment.

[@ScottAllenTVH]

Sharpe, Sortino, ulcer index, Martin Ratio/UPI, r-squared will all address this in principle, though mathematically different.

[@AlgoTradingWithKevinDavey]

@@ScottAllenTVH Agreed

[@villumschroeder1255]

Kevin, Where is the Average drawdown figure? Is it in the performance report or do you have to calculate it? Thanks!

[@AlgoTradingWithKevinDavey]

Most trading software does not calculate it, they give max drawdown most of time. I calculate it.

[@villumschroeder1255]

@@AlgoTradingWithKevinDavey I found it on the Trade Analysis tab under Run-up/Drawdown. There is a value for the Average of each.

[@villumschroeder1255]

I think I found it on the Trade Analysis tab in the Run-up/Drawdown section. 👍

[@AlgoTradingWithKevinDavey]

@@villumschroeder1255 I recommend checking it just to be sure it is the average drawdown of all days, including peak high days.

[@UnemployableFakeGuru]

He Champ, You sound like a German... always mentioning: "Diplom Ingenieur"

[@AlgoTradingWithKevinDavey]

It separates me from the multitude of trading educators who have never traded, or who can't trade.

[@HitAndMissLab]

I don't understand how nobody sees a flow in that approach. Drawdowns don't add up, while net profits do. So, if one has more trades in one test then in the other test these two tests will have a different net profits. Better metric is simply a standard deviation of the equity curve divided by a slope of equity curve. That metric is comparing two relative values so with it one can compare different strategies with different number of trades.

[@AlgoTradingWithKevinDavey]

Thanks for the comment, I appreciate it. If what you are doing works, stick with it!

[@smetljesm2276]

Why use days without drawdown in this metric?. it just paints a pretty picture, no? By this you could have 99 days of postive equity and blow up your account on the last day and still have AVG drawdown at 1% Maybe only average days in drawdown... Or better still tell that avegare and max drawdown plus total number of days spent in drawdown. Now that would be useful for expected psychology effects 😅😅

[@AlgoTradingWithKevinDavey]

Thanks for the comment. You have mentioned alternatives definitely worth looking at!