Sharpe, Sortino & Calmar in Plain English
Three ratios the pros use to judge returns against risk — translated into something a retail trader can actually use.
Two traders both made 30% last year. One did it on a smooth climb; the other did it on a rollercoaster that twice cut the account in half. Same return, wildly different experience — and you'd hand your money to very different people. Risk-adjusted return ratios exist to put a number on that difference. The three you'll meet most often are Sharpe, Sortino, and Calmar. They sound like a law firm; they're just three ways of asking "how much return did you earn per unit of pain?"
Sharpe: return per unit of wobble
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