Risk Score
The Risk Score (0–100) measures how well a strategy protects capital. A high-return strategy with devastating drawdowns will get a low risk score, while a steady equity curve with controlled losses scores well.
How It Works
The Risk Score evaluates multiple weighted metrics that capture different dimensions of capital protection. Each metric is normalized to a 0–100 scale and combined into the final score.
Key areas assessed include the depth and duration of drawdowns, risk-adjusted returns, equity curve stability, and recovery characteristics.
What Makes a Good Risk Score
| Score | Meaning |
|---|---|
| 80–100 | Excellent capital protection — smooth equity, shallow drawdowns |
| 60–79 | Good risk management with manageable drawdowns |
| 40–59 | Elevated risk — significant drawdowns or volatility |
| 0–39 | High risk — strategy may be too dangerous to trade |
How to Improve
- High Max Drawdown? Review your stop-loss levels — exits may be too wide relative to trade targets
- Low Sharpe Ratio? Returns are too volatile relative to gains — consider filtering trades by market regime
- Low K-Ratio? Equity curve is erratic — look for periods of concentrated losses in the Calendar Returns view
- Long Drawdown Duration? Strategy takes too long to recover — may need diversification across uncorrelated strategies in Portfolio Studio
Tip
Use Monte Carlo simulation to stress-test your risk profile — see how drawdowns could behave in scenarios worse than your backtest history.
Tip
Ready to evaluate your strategy's risk? Start free trial — no credit card required.