Engineering Alpha

Engineering Alpha

Add This Performance Metric to Your Strategy Evaluation

A Guide to the K Ratio from A to Z

Sofien Kaabar, CFA's avatar
Sofien Kaabar, CFA
May 13, 2026
∙ Paid

Most traders spend a lot of time asking one question:

How much did the strategy make?

That’s a fair question. But it’s not enough.

A strategy that makes 40% in a backtest can look great until you notice how it got there: flat for two years, one huge month, then a long drawdown. Another strategy might make 25%, but with a smoother equity curve, smaller setb…

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