Ratio

Define Sharp Ratio: A Guide to Leveraging Forex Trading

4 min read

The sharpe ratio is a popular risk-adjusted return measure, utilized by traders in the forex markets to assess the effectiveness of their investments. It is the ratio of excess return generated over and above the amount of risk taken in the investment. This ratio can be used to compare the return on different investments and to determine how much risk is necessary to achieve a desirable return. The Sharpe ratio helps investors to identify which investments offer the best risk-return tradeoff, while also helping guide strategic asset allocation decisions.