How to Evaluate a Trading Strategy: Key
What if your strategy's backtest shows $50,000 profit, but you'd have quit trading it after a 30% drawdown? The numbers don't lie—but they can deceive i...
trading strategy metrics is an essential topic for every trader looking to improve their futures trading. What if your strategy's backtest shows $50,000 profit, but you'd have quit trading it after a 30% drawdown? The numbers don't lie—but they can deceive if you don't understand what they mean. Backtesting a strategy and seeing "Net Profit: $50,000" over three years might make you want to deploy it immediately. But this single number tells you nothing about how that profit was achieved or what risks were taken along the way. In this guide on trading strategy metrics, we explore the key concepts and tools every trader needs to know. Key fact: A strategy making $10,000 with a 50% drawdown is very different from one making $10,000 with a 10% drawdown—even though the P&L is identical. According to TradingView Strategy Analyzer 2026, "A strategy making $10,000 with a 50% drawdown is very different from one making $10,000 with a 10% drawdown—even though the P&L is identical." Net Profit is the most intuitive metric but also the most misleading if looked at alone. It doesn't account for the path taken to reach that profit or the risk involved.