Drawdowns First, Returns Second
Most investors start with the return column. Start with the drawdown column instead. A drawdown is the peak-to-valley decline in account equity, and it tells you what you would have had to live through to earn those returns. Ask three questions: how deep was the worst drawdown, how long did it take to recover, and how often do losing stretches occur.
A program averaging 12 percent a year with a worst drawdown of 25 percent demands a different stomach than one averaging 9 percent with a worst drawdown of 10 percent. Neither is automatically better — but you need to know which one you can actually hold.
Length and Quality of the Record
A three-year record tells you almost nothing about how a program handles a full market cycle. Ten or more years, across trending and choppy regimes, is far more informative. Check whether the record is actual client performance or hypothetical back-tested results — disclosure documents must label this clearly. Hypothetical results were prepared with hindsight, and they routinely overstate what live trading delivers.
Also check for consistency. One enormous winning year inside an otherwise flat record can flatter every average. Look at the year-by-year table, not the summary line. And confirm the record belongs to the same people and the same program you would actually be buying — advisors sometimes present a predecessor track record or a related composite that is not quite the thing on offer.
Risk-Adjusted Measures and Honest Limits
Ratios like the Sharpe ratio or MAR ratio (return divided by worst drawdown) help compare programs on a risk-adjusted basis, but treat them as rough tools, not verdicts. All of them are computed from the past, and markets do not owe anyone a repeat. Two programs with identical ratios can feel completely different to live with if one loses steadily in small bites and the other gives back a year of gains in a single bad month.
Futures trading involves substantial risk of loss and is not suitable for all investors. When we walk clients through track records at AgriculturalHedging.com, the goal is not to find the program with the best numbers — it is to find one whose bad stretches you can survive without bailing out at the worst moment.