Risk management
How to read performance without being misled by numbers
Performance means little without period, risk, and volatility context.
Trading and investing involve risk and may result in partial or total capital loss. Historical examples or simulations do not guarantee future outcomes.
This section does not provide personal financial advice. Information is general and methodological, and requires the user's own judgement and independent review.
Performance reading starts with the risk carried to produce the number, not with the number alone. High return without drawdown, volatility, sample size, and market-regime context can create false confidence.
In MADO methodology, every performance metric is tied to measurement period, asset type, loss limits, trade frequency, and deviation from plan. Performance becomes an explainable result, not a marketing headline.
A responsible performance dashboard clarifies context: when improvement appeared, which scenario cost the most, and where exposure should be reduced or assumptions retested before risk is increased.