What risk-adjusted return means
Risk-adjusted return is a family of metrics. Each member divides return by a different definition of risk, and that choice decides what the metric rewards.
Sharpe divides by total volatility. Sortino divides by downside volatility only. Calmar divides by the worst peak-to-trough decline. Each answers a different question about the same profit curve.
Why raw return keeps winning anyway
Public leaderboards rank on profit because profit is easy to compute and impossible to argue with. It is also the number a single oversized winning position can produce, which is why the top of an unadjusted board tends to churn.
Risk adjustment is what makes past performance carry any information about the next month. A trader who earned 25% with an 8% worst decline has shown something repeatable; one who earned 40% through a 30% decline has shown they were willing to hold on.
Where 0xinsider uses risk-adjusted return
A trader grade summarizes historical performance. Risk metrics provide the context behind the return: volatility, downside variability and peak-to-trough losses answer different questions. Read them alongside profit, the resolved-market count and current exposure; no historical rating guarantees the next result.
