>If you use the Sharpe to select a trading system then it is enough that you understand it functionally. That is very simple: Select the system with the highest Sharpe.
Seems like you don’t understand either how to use the Sharpe ratio functionally.
>If you believe the latter, I would expect that on average subscribers with better knowledge of trading, statistics and performance measures would be at an advantage compared to those who are lacking such knowledge.
Good point.
>A logical conclusion would then be that we should educate those lacking the knowledge and skills
People who seemingly have doctorate degrees do not want to understand and lack such knowledge; Forget about the layman…
>and convince them to educate themselves rather than giving them an illusion that some easy to understand measure will pave the way to financial freedom.
No single measure will ever suffice. You know that.
Good point. Wall Street has a great way to generate liquidity: the media. They have perfected the art of making everybody sell when they want to buy and make everybody buy when they want to sell…
Then go ahead and explain to Ross’ grandma how to use the Sharpe ratio.
BTW, how do you feel about Mosaik (E. Agg.) Hedge now?
Why should I?
Because that is the topic of this thread.
No it is not.
Yes it is.
Grandma shouldn’t be trading at C2.
> Grandma shouldn’t be trading at C2.
There are a lot of people a lot less savvy than Nana trading at C2.
There are vendors selling advice on C2 that could learn from Granny
too (I bet Granny understands what a stop is, many vendors do not).
And don’t kid yourself, dumb dollars are worth just as much as smart
money. If I were Mathew (or any vendor) I would take both.
I understand your happiness. Both your APD and Sharpe are rather miserable
>If I were Mathew (or any vendor) I would take both.
No I wouldn’t. In my opinion only sophisticated traders should be trading at C2. It is not just about money…
I think the concept that Sharpe is not that hard is misguided. The link below is the Sharpe ratio. I doubt that even 5% of C2 users can look at the formula and give a good and cogent explanation of what it means:
http://en.wikipedia.org/wiki/Sharpe_ratio
Right. The problem that I have with some of the later posts (including that of myself) is that it sounds somewhat elitarian (hope this is an English word?) or arrogant. I know that some of my collegaues tend to reason like “if you are too thumb to understand what I say then I definitely won’t explain it to you”. I don’t want to have that attitude.
Ross, why don’t you edit that Wiki page and propose your APD as an alternative to the Sharpe ratio that is easier to understand for lay people?
But that is an encyclopedia, not a text book. Wikipedia explicitely states that it wants an encyclopedian style. I contributed to some Wikipedia articles and if you try to simplify matters then other people will complain that it isn’t exactly true, that it is not math, etc. Try
http://www.investopedia.com/terms/s/sharperatio.asp
If you just skip the formula, I think that text isn’t very difficult. This is only one source. Probably there are better ones.
Probably because C2’s design made sense for when I created the APD (Hold & Hope), based on the structure of the track record. There were lots of people trying to con newer traders by not taking a loss or other things. I found that the APD ratio cracked open some of their. But all of the stats are useful. It is just sad that some of them read like a calc or advanced stats formula. Not everyone is a mathematician.
The Sharpe is the purpose of the page. There are numerous other alternatives, such as Sortino. I suspect adding APD would be edited out within a couple of weeks. I tried on other Wikipedia pages, but there was always some wiseguy who would delete lots of other people’s work, crafted a sentence at a time, by dumping in textbook-type information, as opposed to the grassroots development approach (which was often surprisingly interesting). I gave up on wikipedia editing, but it is a phenomenal resource otherwise.
>>If I were Mathew (or any vendor) I would take both.
>No I wouldn’t. In my opinion only sophisticated traders should be trading at C2. It is not just about money…
Really!
If you were in the paint business would you only sell paint to
top of the line pro painters? How many people do a lousy job painting?
Shouldn’t we protect them from themselves?
If you sold seafood, would you limit your sales to top chefs? Think of
the over cooked lobsters! It’s a travesty (seriously, it’s a crime). Better they rot on the shelf than be poorly prepared.
Seriously: C2 would be out of business if it limited itself to “sophisticated traders”. Indeed, truly “sophisticated traders”
(both vendors and subscribers) don’t need C2.
C2 is a tool. If a novice trader can benefit from that tool than excellent.
To deprive the “unsophisticated” is both foolish from a business POV and arrogant beyond my comprehension.
Yes I agree, my APD and Sharpe are truly “miserable” , but my grandma and most importantly my trading account are not 
After all isn’t that what counts??
I can try to write a low-level explanation for the Sharpe, but is that what you want? Or do you want another measure? Or do you want somebody else to do it?
