This tutorial discusses the importance of evaluating the risk of a trading strategy.

We shed light on why maximum drawdown is not a measure of risk, and provide examples of how looking solely at drawdown can often mislead both traders and investors.

The concept of Value-at-Risk is introduced, emphasis being placed on the pitfalls of using solely the volatility of past returns in ascertaining VaR at any level of confidence, and why Darwinex does not use standard VaR calculations as prevalent in industry and has its own proprietary metrics for calculating more realistic estimates of the Value-at-Risk of any trading strategy.

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Topics: #darwinex #var #risk #trading #dleverage

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