Performance Metrics Dictionary

Learn how MyFinanceSheet calculates statistics to isolate your setups' mathematical edge.

Trading Expectancy

Expectancy = (Win Rate * Avg Win) - (Loss Rate * Avg Loss)

Measures the average net value you expect to make per trade. A positive expectancy indicates a winning strategy over a large series of trades.

Profit Factor

Profit Factor = Gross Profit / Gross Loss

A key measure of return relative to risk. A profit factor above 1.5 indicates a highly robust system.

Sharpe Ratio

Sharpe = (Avg Return - Risk Free Rate) / Std Dev of Return

Calculates the risk-adjusted returns of your portfolio. Helps you understand if your gains are from smart edge execution or excess volatility exposure.

R-Multiple (R)

R-Multiple = (Exit Price - Entry Price) / (Entry Price - Stop Loss Price)

Expresses trade outcomes in terms of unit risk. An outcome of 2R means your gain was double your initial stop loss risk unit.

Max Drawdown

The maximum observed peak-to-trough decline in your portfolio equity curve. Essential indicator for measuring risk profiles.

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