Value at Risk or VaR

You all have read these disclaimers:

“Trading may carry a high degree of risk to your capital”

Indeed, trading is risky. But you’ll probably agree that not all trading strategies carry the same risk. Wouldn’t it be great to have one single risk measure that tells, at a glance, how risky a given trading strategy is?

Forget Max. Drawdown, Max. Leverage or Standard Deviation… at Darwinex, risk is measured in terms of Value at Risk or VaR (note: we do also analyse Max. Drawdown, Max. Leverage & Standard deviation).

Understanding VaR

VaR measures the percentage of loss a trading strategy is likely to suffer in the worst month out of every 20 months. In other words: what is the risk an investor is taking when investing in a given strategy?

Because at Darwinex we know how important risk is when talking about trading strategies, we have recorded a brief tutorial that will help you to understand how we measure risk and why VaR is a powerful way to compare risk across trading strategies! 

Liked it? Your feedback would be greatly appreciated! Trade safe everyone!

 

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Trackbacks & Pingbacks

  1. […] volatility, it will be undergoing readjustments both to obtain better profitability and so that the VaR of the Darwins will not be affected, because the system evolves taking into account this important […]

  2. […] tan tremendo estará sufriendo reajustes tanto para conseguir mejor rentabilidad como para que el VaR de los darwins no se vean afectados, porque el sistema va evolucionando tomando en cuenta esta […]

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