A trading robot should be judged on its numbers — not on its total profit. Here are the 7 metrics that genuinely matter, what each one means, and the threshold beyond which your EA becomes dangerous.
1. Maximum drawdown — the survival metric
Drawdown is the worst fall in your equity from a peak. It is the number that determines whether you survive.
- ✅ Healthy: < 10%
- ⚠️ Watch closely: 10–20%
- ❌ Dangerous: > 20%
One caveat: drawdown measured on closed trades is a floor. Floating drawdown (open positions sitting at a loss) can be far worse.
2. Profit Factor — does it win more than it loses?
Profit Factor = gross profit ÷ gross loss.
- ✅ Solid: > 1.6
- ⚠️ Borderline: 1.2–1.6
- ❌ Losing: < 1
A PF of 5+ is not a good sign: more often than not, it points to a track record that is too short or over-optimised.
3. Recovery Factor — can it take a hit?
Recovery = net profit ÷ maximum drawdown. It measures the ability to bounce back from a fall.
- ✅ Good: > 2 · ⚠️ Average: 1–2 · ❌ Weak: < 1
4. Win rate — a trap when read on its own
The percentage of winning trades. A high win rate is no guarantee: a robot winning 90% of the time can still wipe out an account if its rare losses are enormous (martingale). Always read it alongside the payoff.
5. Payoff (average win / average loss) — the asymmetry
Payoff = average win ÷ average loss.
- A payoff below 0.5 combined with a high win rate means a fragile model: performance rests entirely on the hit rate, which erodes as soon as market conditions shift.
6. Sharpe / consistency — the quality of the return
The Sharpe ratio measures risk-adjusted return (consistency). The higher it is, the more the gains come from steady performance rather than a handful of lucky trades.
- ✅ Good: > 1 · ⚠️ Acceptable: 0.5–1 · ❌ Erratic: < 0.5
7. Martingale detection (MSR) — the risk of ruin
If the robot increases position size after every loss, it is running a martingale. This is measured with the MSR (Martingale Safety Ratio = how many consecutive losing steps your capital can absorb).
- MSR > 10: reasonable margin · MSR < 5: ruin is likely on a bad losing streak.
Martingale is the number one cause of blown accounts. A robot can post months of steady gains and then give everything back in a single day.
The trap: these 7 numbers must be read together
No single metric is enough on its own. An 88% win rate is reassuring… until you see a payoff of 0.2 and a martingale underneath it. It is the combination that reveals the real risk.
Calculate all of them in 60 seconds
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In summary
Look at drawdown + profit factor + recovery for survival, win rate + payoff together to spot fragility, Sharpe for consistency — and stay away from martingale.