At CTI, our Return / Drawdown Benchmark is 3. The Return/Drawdown Ratio is a metric used by investors to evaluate the performance of a trading strategy or investment portfolio. It’s calculated by dividing the total returns (or profits) by the maximum drawdown over a specific period.
Here’s a simple breakdown:
<ol>
<li>Return (or Profit): This is the gain achieved by a trading strategy over a set period. It represents the positive outcomes of the strategy.</li>
<li>Drawdown: This represents the largest drop from a peak to a trough during a specific period for a trading account. In other words, it indicates the highest loss a trader has experienced before gains start to occur again. A significant drawdown can be an indication of high risk.</li>
</ol>
For example, a Return of 24% and a Drawdown of 8% would give a Return/Drawdown ratio of 3.
The benefit of this indicator is that the more profit the trader makes, the higher the ratio.
A higher Return/Drawdown Ratio is typically seen as better, indicating that for every unit of risk (drawdown) taken, there’s a higher unit of reward (return).
Conversely, a low ratio can suggest that the returns do not adequately compensate for the risk taken.

At CTI, our Return / Drawdown Benchmark is 3. The Return/Drawdown Ratio is a metric used by investors to evaluate the performance of a trading strategy or investment portfolio. It’s calculated by dividing the total returns (or profits) by the maximum drawdown over a specific period.
Here’s a simple breakdown:
Return (or Profit): This is the gain achieved by a trading strategy over a set period. It represents the positive outcomes of the strategy.
Drawdown: This represents the largest drop from a peak to a trough during a specific period for a trading account. In other words, it indicates the highest loss a trader has experienced before gains start to occur again. A significant drawdown can be an indication of high risk.
For example, a Return of 24% and a Drawdown of 8% would give a Return/Drawdown ratio of 3.
The benefit of this indicator is that the more profit the trader makes, the higher the ratio.
A higher Return/Drawdown Ratio is typically seen as better, indicating that for every unit of risk (drawdown) taken, there’s a higher unit of reward (return).
Conversely, a low ratio can suggest that the returns do not adequately compensate for the risk taken.

What is Return/Drawdown Ratio?