Sharpe Ratio Formula: Calculate Market Returns with Accuracy
The Sharp Ratio is a powerful tool for Forex traders, as it can help you determine how profitable your portfolio is. The formula for the Sharp Ratio is simple: it is calculated by subtracting the risk-free rate from the average rate of return of a security or portfolio over a given period of time, and then dividing the result by the standard deviation of the investment’s returns over the same time period. By understanding the Sharp Ratio, Forex traders can use the data to make more informed decisions about their investments.