What is the Track record and what is this concept used for in finance?

Investors use track records a lot to make decisions. The track record is the results curve of an investor, a collective investment institution or a system of trading for a specified period.

In the track record you can view the operations that a trader or person in charge has carried out in a period of time; you can see the results that have been obtained. It will be a record that you carry out to see how the results have moved.

Assessing the results offered by the history of operations is essential to know which variables we have to take into account. We have to draw general conclusions through the study that we have to analyze.

Among the most outstanding statistics in track record studies, we highlight the following:


  • Profitability. The total net profit between the initial deposit. The result is multiplied by 100.
  • Factor, the benefit (profit factor). It informs us of how many monetary units we gain for each one that we lose.
  • Percentage of success. It informs us of how much the system gains when it is successful and how much it loses when it fails.
  • Draw Down maximum. Maximum reduction with respect to our capital during the period studied.

In addition to these measures, we also have to take into account others that we have not mentioned, such as VaR, volatility or a Monte Carlo simulation.

It is also important to mention that to study a track record it is necessary that it be audited by a company that is legally qualified to do so. If the track record is not audited, it will be worthless and not worth the investment.

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