Two accounts finish the year at the same value, built from the same set of returns. One you could have held without much stress. The other spent months trading below…
A few years back I held six positions spread across different sectors, the kind of book that looks diversified on paper. On the three worst sessions of that stretch, all…
A trader can be right more often than wrong, collect two dollars on every winner for each dollar lost, and still drive the account to zero. It sounds impossible until…
I look back at one of my own ledgers and the pattern is always the same. Eight months of small losses and tiny scratches, the equity curve flat enough to…
The sortino ratio is a risk-adjusted return measure calculated as a strategy's excess return over a minimum acceptable return, divided by its downside deviation. The formula in one line is…