Rent a Signal service development and suggestions - page 47
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Benefit to risk ratio reveals more about the true value of a system than pips count, imho. Pips count is fine for fixed lot size systems.
Edit: and R/R ratio applies to fixed lots too...
Benefit to Risk Ratio:
A) ((Equity - Amount of Initial Investment = $______.___ /Amount of Initial Investment) *100 = _________%)
:
B) Relative DD in Percent.
To convert to a ratio: a/b = ____ : 1
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Example:
Trader starts with 1K and has an equity of $1,200.00...so he has made 200 bucks which is 20% ROI ...during this time he has seen a 10% DD.
A) $1,200.00-$1,000.00= $200.00/$1,000.00*100= 20%
:
B) 10% Relative Drawdown (max intraday DD)
20%/10% = 2 : 1
ES
P.S. It is always a ratio to 1
So, Risk Ratio =
(Equity - Initial Deposit)/Initial Deposit * 100.
Right?
And it can be precented on the image together with ROI (because the image is changed based on initial deposit, lot size and so on) - it is 10p3v0.03 EA public signals ID 378:
So, if
Risk Ratio = (Equity - Initial Deposit)/Initial Deposit * 100,
so the Risk Ratio depends on buyers Initial deposit size (it can be any size), Lot Multiplier (buyer can multiply seller's lot sizes).
Right?
So, every buyer will have his own Risk Ratio for same signal ID. And the buyer can select/sort it.
I think it can be precented in the balance/equity graph together with ROI.
Because I need to explain it to the developers to program ... that is why Iam asking.
So to make this clear....
You can convert it to a formula yourself...
A buyer invests 1K and never experiences more than a 10% loss (even from his new balance which includes his profit) and makes 20%. The profit is twice as much as his risk.
This is expressed as a ratio...in this case his profit is double his realized or unrealized risk which is a 2:1 ratio.
ES
P.S. As you can see if you understand this....The Benefit yields twice the pain to tolerate in the example above... so it is worth it!....This is ALL THAT YOU NEED TO KNOW to measure the robustness of a Signal in RAS and would fit with Jairo's observations as to what a serious buyer needs to know, other than sample size. I cannot think of any other benchmark that is so complete as this....it does everything in simple terms for a professional or a novice to evaluate and compare with....it reveals all that one needs to know. This will make RAS even more unique and serious.
Yes but ... it is ROI?
It is formula for ROI?
I must say that RAS is an "open architecture" model for traders....not just for investors.
The statistics page and the freedom that RAS allows is just unique....I do not know of any other customizable solution out there that compares to RAS.
Some of you might say...ohh RAS has problems....Well folks we have had this in Beta now for several months and ND has allowed all of us to get involved...
There are not any problems with execution now....we have come a long way...
These final touches are aesthetic and the bulk of this Beta is complete. We soon can reap the benefits of RAS...I personally plan on subscribing to a few signals myself that I have been watching in the Beta....
ES
P.S. How anybody can form an opinion based on Beta Development is just short sighted. We have been a part of a classroom that ND has led....what an incredible opportunity! I am so curious to see the finished product in "True HD" hehe
☺
P.P.S. There may be many other Signal Services out there...but shouldn't Forex tsd have the best Stats page?
I think it is formula for ROI ...
Yes that is ROI...you have some more steps in the formula...
You now need to compare it to max Intraday DD...or Relative DD.
so if you have....
20% ROI and 10% DD...it is 2:1
ES
ROI % / DD% = ___: 1
I think it is formula for ROI ...
so if you have 30% ROI and 40% DD....you will have a ratio of 0.75:1
you normalized ROI in percent....and then take the DD seen in percent....to calc the ratio...
This covers time....investment....benefit....risk.....it normalizes robusteness...This is so simple and the professional Futures traders that I know use this....but they are not in the Forums.
ES
P.S. I think it is called by different names...like a Equity to Balance Ratio or something like that...but for the investor or layman...we could just as easily name it Benefit to Risk Ratio...or HeHe... "Pain Factor" ☺