Risk-Reward Ratio (RR)
What it measures: The average profit from your winning trades divided by the average loss from your losing trades.
Why it matters: A higher RR means you make more money on winning trades than you lose on losing trades.
Example:
If your winning trades average $150 profits and losing trades average $75 losses, your RR is 2.0 ($150 ÷ $75). This means you make twice as much on winning trades as you lose on your losing trades.
How to improve: Set wider profit targets relative to stop losses, or tighten your stop losses while maintaining realistic profit targets. Focus on trades where the potential reward significantly outweighs the potential risk.
Winning Ratio (WR)
What it measures: The percentage of trades that are profitable.
Why it matters: Higher win rates indicate better market timing and entry skills. However, a high winning ratio must be balanced with proper risk-reward ratios.
Example:
If you place 100 trades and 65 are profitable, your WR is 65% (65 ÷ 100). This means you're successful on about two-thirds of your trades.
How to improve: Focus on higher-probability setups, improve your market analysis, wait for better confirmation signals before entering trades, and avoid overtrading in uncertain market conditions.
Take Profit/Stop Loss Usage (TP/SL)
What it measures: The percentage of trades with proper (TP and SL) risk management orders.
Why it matters: Consistent use of TP/SL orders shows discipline and protects against emotional decision-making during volatile markets.
Example:
If you place 50 trades and 35 have both TP and SL orders set, your usage rate is 70% (35 ÷ 50). This indicates strong risk management discipline.
How to improve: Make setting TP/SL orders part of your standard trading routine. Never enter a trade without defining your exit strategy first. Resist the urge to move stop losses against you or remove them entirely.
Consistency Score
What it measures: How closely your actual account performance follows a stable growth pattern over time.
Why it matters: Consistent growth indicates sustainable trading methods rather than lucky streaks or high-risk gambling approaches.
Example:
A consistent trader grows their account steadily each month with predictable returns, while an inconsistent trader might have huge gains followed by significant losses, creating an unpredictable equity curve.
How to improve: Focus on position sizing, avoid overtrading during hot streaks, maintain the same risk management approach regardless of recent performance, and stick to your trading plan consistently.
Daily Return Performance (Master Accounts Only)
What it measures: Your average daily account growth, calculated using geometric averaging to account for compounding effects.
Why it matters: Sustainable daily returns show whether your trading strategy can generate consistent, compounding growth without relying on high risk. This metric reflects the real impact of gains and losses over time, evaluating whether your trading approach can scale effectively with larger capital.
Example:
A trader who grows their account from $10,000 to $11,000 over 20 trading days demonstrates their ability to generate steady, compounding returns over time.
How to improve: Focus on quality over quantity in trade selection, maintain consistent position sizing, avoid revenge trading after losses, and develop strategies that can perform consistently across different market conditions.
Calmar Ratio (Master Accounts Only)
What it measures: Your annualized return divided by your maximum drawdown. It is essentially how much return you generate per unit of risk taken.
Why it matters: This shows whether your profits justify the risks you're taking. Higher ratios indicate more efficient risk-adjusted returns and better capital management skills.
Example:
A trader with 30% annual return and 10% maximum drawdown has a Calmar ratio of 3.0 (30 ÷ 10), meaning they generate 3 units of return for every unit of maximum risk taken.
How to improve: Reduce position sizes during drawdown periods, implement better stop-loss discipline, focus on capital preservation during difficult market conditions, and develop strategies that minimize large losing streaks.