Sharpe Ratio
Risk-adjusted return metric. Excess return divided by volatility. Above 1.0 is good; above 3.0 is excellent.
In Depth
Sharpe Ratio is a fundamental concept in prediction market trading. In platforms like Polymarket with thousands of active markets, understanding sharpe ratio is essential for consistent profitability. TradeSphere data across 5,400+ markets shows that traders who master these concepts significantly outperform those trading on instinct.
In practice, sharpe ratio connects to Profit Factor, Drawdown, Win Rate. PolyPulse tracks these metrics and publishes weekly analysis. For hands-on application, PolyFire provides real-time market data and copy trading via Telegram.
Related Terms
3Profit Factor
analysisGross profits divided by gross losses. Above 1.0 is profitable; above 1.5 is healthy; above 2.0 is excellent.
Drawdown
analysisPeak-to-trough decline in portfolio value. Maximum drawdown shows worst historical decline — key risk metric.
Win Rate
analysisPercentage of profitable trades. High win rate alone does not guarantee profitability — depends on win/loss size ratio.
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