Why Win Rate Isn't Enough
Your bot has a 70% win rate — sounds great, right? But what if winning trades average +1% while losing trades average -5%? Then you're losing money despite a high win rate. You need a metric that accounts for both returns AND risk: the Sharpe Ratio.
What the Sharpe Ratio Measures
The Sharpe Ratio compares excess returns (your returns minus the risk-free rate) to volatility. In simple terms: How much return do you get per unit of risk?
Rule of thumb: Below 0.5 is poor (too much risk for too little return). 0.5 to 1.0 is acceptable. 1.0 to 2.0 is good. Above 2.0 is excellent. Above 3.0 you should be skeptical — it may indicate overfitting.
Sharpe Ratio on BotTrade.app
Every backtest and every running bot displays its current Sharpe Ratio. On the leaderboard, you can sort strategies by Sharpe Ratio — showing you the most consistent performers, not just the luckiest ones.
Maximum Drawdown: The Second Key Metric
In addition to the Sharpe Ratio, pay attention to the maximum drawdown — the largest decline from a peak. A bot with +50% PnL but a 40% drawdown is riskier than one with +30% PnL and a 10% drawdown.
Analyze your bots with professional-grade metrics — on BotTrade.app.