The Sharpe Ratio is a risk-adjusted performance metric often tracked in advanced trading journals. It measures average return per unit of volatility (standard deviation of returns). Journaling tools (MyFxBook, Edgewonk, etc.) include Sharpe ratio under “Advanced Stats”. For algorithmic traders, a high Sharpe ratio means the robot’s returns are strong relative to their drawdowns. Monitoring Sharpe helps developers ensure that modifications haven’t just increased raw profits at the cost of much higher volatility. In practice, if a new version of an EA has a higher Sharpe ratio on your journal reports, it suggests a better return/risk balance. Edgewonk notes that including Sharpe ratio in journals gives “a deeper understanding of system reliability”. Thus, Sharpe is one key metric among journaling analytics to compare strategy robustness.

Back to Robots Glossary Index