1. Added HTML and PDF export options for trading reports. Sharing your trading achievements with colleagues and investors is easy with this option. The File menu and the Report menu now offer export commands.
2. Market Watch window can now be saved as a CSV file. In the context menu, select Export. Metrics selected during export will be saved in the file. The context menu can be used to enable additional columns for saving more data.
3. Margin requirements are now displayed more clearly in contract specifications. Specifications now display the final margin values instead of ratios and initial parameters. The dialog will display corresponding levels if the margin amount depends on the position volume.
4. Demo accounts are no longer supported by the Signals service. The new trading report provides enhanced statistics on your training accounts. You can view growth, equity, and balance graphs, as well as diagrams of trade distribution by direction and instrument, as well as many other metrics that characterize the profitability and risks of your strategy.
5.The potential profit/loss value is now displayed when editing Take Profit and Stop Loss for Stop Limit orders.
6. The Payment system has been fixed and improved.
7. Market Watch now correctly checks for duplicate symbols when loading a *.set file.
8. Parallels web installer has been fixed. The platform will now install correctly on macOS with M1/M2/M3.
9. Translations of user interfaces have been updated.
10. Crash log errors have been fixed.
New MetaTrader Report: 5 key trading metrics
Successful trading in financial markets requires thoughtful and well-founded decision-making. Comprehensive performance analytics can assist traders in making informed investment decisions and in optimizing their strategies. In this article, we will look at five key performance indices which characterize trading efficiency and stability.
1. Sharp Ratio
An annual growth of more than 1,500% is shown in the following trading report. There are no sharp drops or spikes in the balance and growth diagrams. Sharpe Ratio of 0.04, which indicates the trader is taking very high risk, prevents the strategy from being considered stable.
Sharp Ratio = (Rx – Rf) / StdDev Rx
Rx = Expected portfolio return
Rf = Risk free rate of return StdDev
Rx = Standard deviation of portfolio return / volatility
Following is an interpretation of the Sharpe ratio:
- Sharpe Ratio < 0 Poor. The strategy is generally unprofitable.
- Sharpe Ratio < 1.0 Undefined. There is no justification for the risks. The use of such strategies can only be considered when there are no alternatives.
- Sharpe Ratio ≥ 1.0 Good. A Sharpe Ratio greater than 1 indicates that the risks are justified by the performance of the portfolio/strategy.
- Sharpe Ratio ≥ 3.0 Excellent. Trades with a high ratio have a lower probability of losing.
The strategy is unprofitable if the Sharpe ratio is less than zero. Balance and growth diagrams alone can reveal such poor results, regardless of the Sharpe Ratio.
2. Maximum Drawdown
According to the above report, the maximum drawdown is 3.12%, which indicates a very high risk. Graph above shows a 0.60% drawdown in June 2023. Risks of this magnitude are considered extreme since optimal drawdowns should be no more than 20-30%.
What are the reasons why the optimal drawdown should not exceed 30% (ideally less than 20%)? The historically recorded drawdown can actually be exceeded by a factor of 2 or more when choosing a trading strategy. Such a drawdown value can be tolerated by a trading account. The maximum drawdown could, however, be 100% in the future if the maximum drawdown is 3.12%, thus resulting in the loss of all funds.
3. Profit Factor
Financial trading is primarily intended to generate profits. Profits from winning trades should outweigh losses from unprofitable ones in any trading strategy. In other words, the Profit Factor shows how much profits exceed losses.
There is a bad profit factor of 0.96 in this report. Therefore, the diagram is in red.
4. Max. Deposit Load
For all strategies, there is no optimal deposit load value. Trading styles and position holding times determine the load. The aim of scaling strategies is to generate profits from small price changes and to open positions with increased volume, so higher deposit shares can be utilized.
The margin requirement for margin trading, including Forex, is significantly lower due to the leverage provided. In addition to allowing for greater profits from small price changes, this strategy also carries a higher risk of losing money if the currency pair moves in an unfavorable direction. Leverage, for example, reduces margin requirements by 100 times when opening a position. If the price moves 100 points in the opposite direction after a trader opens a position for the entire deposit, the entire deposit is lost. A stop out level of 50% is also frequently set by brokers, which means that losses of 50 points in an unfavorable direction will be significant. For most currency pairs, such a movement falls within the daily range.
In this report, the maximum deposit load is 1.71%. not risky trading such as this puts the metric in the green.
5. Recovery Factor
In the above report, the Recovery Factor is -0.2, which is a good value. There is no better trading strategy than one with a Recovery Factor of greater than 3, with values greater than 3 being more desirable.
Summaries show USD 100297.19 as account equity, which is significantly less than USD 102736.90 as balance in funds mode. With a lower drawdown, but a high profit, the account recovered well.
High Recovery Factor strategies can offset current losses with future profits. Multiple consecutive drawdowns may lead to a zero account balance if the Recovery Factor is less than 1.
There are graphs illustrating balances and equity, as well as growth percentage dynamics, on the Summary page. Below is a summary of the analysis:
- Growth and balance graphs are quite smooth, without sharp fluctuations
- Sharpe Ratio = 0.04
- Maximum Drawdown = 3.12%
- Recovery Factor = 0.2
- Profit Factor = 0.96
- Max. Deposit Load = 1.71%
The trading strategy is not stable or safe even though three out of five metrics show promise. Profits generated come with a high level of risk.
In order to analyse and evaluate trading strategies, all of the statistics considered are important. The best way to analyse performance is to take into account the specific characteristics of each trading strategy and the market conditions as well. Trading results can be improved by using and understanding statistical metrics properly.
As of MetaTrader 5, traders can evaluate their strategy performance directly in the terminal with the updated trading report. By examining strategies’ strengths and weaknesses in detail, comprehensive analytics can identify strategies’ strengths and weaknesses, which if improved can result in a reduction in trading risks and an increase in trading stability.
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