Backtesting a strategy is essential, but what exactly should you optimize for? Is it raw returns? Win rate? Drawdowns? This weekâs episode of Align Your Own Pockets takes a deep dive into a deceptively simple question that unravels a much deeper conversation.
đ Michael and Dave unpack:
Why âmax profitsâ is often not the best answer.
The power of a smooth equity curve for real-world trading.
When win rate might matterâand when it absolutely doesnât.
How equity curve shape can reveal more than metrics like Sharpe or Sortino.
Daveâs unique âequity curve qualityâ metric and how it guides his own trading decisions.
They also explore how to interpret multiple strategies together, not in isolation, and the psychological toll of different system typesâespecially trend following vs. mean reversion.