Does Sharpe Ratio matter?

[molecool]

Enclosed you will find the profit graph and stats of a strategy I hacked up in the past few days - it's back tested for the past four years.

Now, something that stands out is the very low Sharpe ratio of 0.55. Quite frankly, I have tested and traded various strategies over the years and most of them had an SR of 1.2 or higher. However I don't think any of them are as consistent as this little bugger.

So my question is this: Is this a bad strategy because of this low SR which is perhaps caused by the high number of trades (16) it places a day? I just can't correlate this beautiful profit graph with such a low rating.

Or in other words - would YOU run this strategy live?

[NinjaTrader_Jason]

Unfortunately I am not in a position to advise you to trade the strategy or not. I suggest to await some feedback from other users.

More information regarding the Sharpe Ratio can be found at the link below.

http://www.ninjatrader.com/support/helpGuides/nt7/statistics_definitions.htm

Sharpe Ratio
This statistic returns a ratio that measures the risk premium per unit of risk of your strategy. It can help you make decisions based on the excess risk of your strategies. You may have a high-return strategy, but the high returns may come at a cost of excess risk. The Sharpe ratio will help you determine if it is an appropriate increase in risk for the higher return or not. Generally, a ratio of 1 or greater is good, 2 or greater is very good, and 3 and up is great.

(Profit per Month – risk free Rate of Return) / standard deviation of monthly profits

Note:

• NinjaTrader presets "risk free Rate of Return" to a value of zero
• In the event that there is only 1 month of trade history or less, there is insufficient data to calculate the monthly standard deviation of profits in which event, the Sharpe Ratio is set to a value of 1