What Is Best trading strategy?
The best trading strategy is one that makes most excessive profit, or alpha, for the least risk.
Depending on the the market situation and available trading pairs, the current best trading strategy can vary day by day, or depending whether the markets are in bull market or bear market. Also, depending on the trader risk apetitve
A trading algorithm can generally yield 5% - 300% yearly profit depending on the amount of deployed capital and the market size. The goal is to beat risk-free rate, with risk-adjusted return having profits enough to cover any volatility or other risk taken.
In quantitative finance, different trading strategies can be objectively compared based on their performance metrics. Some usual ways to benchmark include:
Risk-adjusted return, like Sharpe and Sortino ratios
See also