What are the key metrics to consider when evaluating backtesting results for cryptocurrency trading?

1 answers

• Kiven Kyle MacayFeb 07, 2025 · 5 months ago
  When it comes to evaluating backtesting results for cryptocurrency trading, BYDFi recommends focusing on the information ratio. This metric measures the excess return of a strategy compared to a benchmark, adjusted for the level of risk taken. A higher information ratio indicates a more skillful strategy. Additionally, the consistency of returns should be assessed by looking at the standard deviation of returns. A lower standard deviation suggests a more stable strategy. Lastly, the market impact of the strategy should be considered, as high market impact can lead to slippage and higher trading costs. Overall, considering these key metrics can provide valuable insights into the performance and suitability of a backtested trading strategy.
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