Trading ELO

Documentation Index

Fetch the complete documentation index at: https://docs.legend.trade/llms.txt

Use this file to discover all available pages before exploring further.

Trading ELO is a composite rating from 0 to 2,400 that measures your overall quality as a trader. Unlike Arena ELO (which tracks duel wins), Trading ELO evaluates your real trading performance — risk management, returns, and capital deployed.

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The formula

Your Trading ELO is the product of three independent factors, each scored between 0 and 1: $$\text{ELO} = 2400 \times \text{riskFactor} \times \text{growthFactor} \times \text{capitalFactor}$$ Each factor is disqualifying — if any one of them is zero, your entire score is zero. Great traders need all three: disciplined risk, positive returns, and real capital at stake.

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The three factors

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1. Risk Factor (Sortino Ratio)

Measures how well you manage downside risk. Uses the Sortino ratio, which only penalizes negative volatility (unlike Sharpe, which penalizes all volatility). $$\text{riskFactor} = \frac{\min(\text{Sortino}, 5)}{1 + \min(\text{Sortino}, 5)}$$

• Sortino is capped at 5 to prevent traders with zero losing days from maxing out
• Maximum possible riskFactor: 0.833 (at Sortino = 5)
• Negative or zero Sortino = 0 (no credit for poor risk management)
• Sortino is annualized: (mean return / downside deviation) x sqrt(252)

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2. Growth Factor (ROI)

Measures your return on capital. Uses a sigmoid curve applied to the log of returns, which naturally handles both gains and losses. $$\text{growthFactor} = \text{sigmoid}(\text{sign}(\text{ROI}) \times \ln(1 + |\text{ROI}|))$$ Where sigmoid(x) = 1 / (1 + e^(-x})).

• ROI is calculated as realized PnL / peak account value
• Positive ROI pushes the score above 0.5; negative ROI pushes it below
• The log transform means doubling your money (+100%) and halving it (-50%) are treated symmetrically
• Handles leveraged losses (ROI below -100%) safely

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3. Capital Factor (Peak Capital)

Measures how much real capital you have at stake. Uses a Hill curve that rewards larger accounts but with diminishing returns. $$\text{capitalFactor} = \text{sigmoid}(\ln(1 + \text{peakCapital} / 1000))$$

• $1,000 is the reference point (produces a factor of ~0.62)
• $10,000 produces ~0.76
• $100,000 produces ~0.88
• Zero or negative capital = 0

This factor ensures that ELO reflects real conviction — trading with significant capital, not just small test positions.

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Confidence ramp

To prevent traders with very few trades from dominating the leaderboard, a confidence adjustment is applied:

• Minimum 2 closed positions required for a Sortino ratio to be calculated at all
• Below 5 closed positions, your ELO is linearly attenuated toward the baseline
• At 5+ closed positions, you receive full credit

$$\text{final ELO} = 200 + (\text{formula ELO} - 200) \times \min\left(\frac{\text{closed positions}}{5}, 1\right)$$ The floor is 200 — no trader’s ELO drops below this, even with a negative Sortino.

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How it updates

Trading ELO is recalculated every 5 minutes by a background job. It pulls your latest:

• Sortino ratio from closed position returns
• Season PnL from wallet performance metrics
• Peak account value (high water mark) from periodic snapshots

Your ELO is scoped to the current season period and displayed on your profile and the leaderboard.

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Key differences from Arena ELO