Blog

A close look at trading metrics — the ones everyone computes and few compute the same way.

• Expected value per trade: why three calculators give three different answers

  The formula is short and everybody knows it, yet everybody gets a different number. Here is where the figures actually diverge — including the six months we showed three of them ourselves.

• Maximum drawdown: from the equity peak or from capital?

  Two ways of expressing drawdown as a percentage produce numbers that differ several times over. Both appear in reports, and almost nobody states which one they used.

• Profit factor lies on small samples

  Thirty trades and a profit factor of 2.1 mean nothing. How many trades the metric actually needs — and what to look at until you have them.

• MFE and MAE: what you left on the table and what you sat through

  The result of a trade tells you how it ended. MFE and MAE tell you what happened on the way — and that is usually where the fixable part is.