Henry P597_ Lee

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How do risk-adjusted performance metrics guide forex strategies?

Metrics like Sharpe Ratio, Sortino Ratio, and maximum drawdown measure returns relative to risk. Institutions demand high risk-adjusted returns before allocating capital. Retail traders often chase raw profits without analyzing sustainability. Benefits: focus on quality, not just quantity of returns. Risks: ignoring risk metrics leads to fragile strategies. By tracking ratios, traders identify whether success comes from skill or luck. Risk-adjusted evaluation makes forex sustainable, proving that performance without context is meaningless.