Evaluating Trading Strategies

When assessing different trading strategies, the primary metric to consider is return on investment (ROI), which encompasses various measurements such as profit, expectancy, and number of pips. The emphasis on ROI highlights the trader's ultimate goal: to maximize profits from their trades. Following this, it is important to evaluate the maximum drawdown associated with each strategy, as a high drawdown can indicate a risky trading approach that may not align with a trader's risk tolerance. Therefore, traders should balance potential profitability against the risks involved, ensuring that they are not sacrificing too much in terms of drawdown for higher returns.