Noon Barbari

Riesgo y gestión del capital

What is a good Sharpe ratio for a trading strategy?

For a retail crypto strategy on daily bars, a backtested Sharpe of 1.0–1.5 is respectable, and anything above ~2.5 should trigger suspicion rather than celebration — in our 5,720-run study, most configurations with spectacular in-sample Sharpes degraded severely out-of-sample. Buy-and-hold BTC has historically produced long-run Sharpes around 0.9–1.1, so your strategy needs to clear that bar to justify its existence.

Context matters more than the raw number: how many trades produced it (30 trades = noise), how many variants were tried before this one (see the deflated Sharpe ratio), and whether it held out-of-sample. A validated 1.2 beats an unvalidated 3.0 every time.

Sharpe ratio (glossary) →Deflated Sharpe calculator →

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