“The right question is never how much did you make -- it is how much did you risk to make it.”
-- Ahmed Tahsin, Founder & CEO
The Direct Definition
The Sharpe Ratio measures how much return a strategy earns for every unit of risk it takes. In plain terms: how much you made, compared to how rough the ride was to make it.
“Same destination -- but one drove with discipline, while the other gambled and happened to win this time.”
How to Read It
Below 1
The return does not justify the risk taken
1 to 2
Good -- balanced return against controlled risk
Above 2
Excellent; a negative ratio means losing against the risk-free alternative
Why It Matters to You
A working example
Two strategies both return 30%: one with a 1.8 Sharpe and a smooth ride, the other 0.6 and violent swings
Return deceives
High profits alone tell you nothing about the road taken
A discipline meter
A high ratio signals a disciplined system, not a lucky streak
Compare before investing
Use it to rank strategies before you ever look at returns
The TIC Angle
The Sharpe Ratio is among the first things TIC examines before releasing any strategy -- and you can inspect our performance and volatility data verified on Myfxbook anytime.
Risk notice: trading carries high risk and you may lose your capital. Past performance does not guarantee future results. Educational content only -- not investment advice.
