FAQs

Omega Ratio FAQs

What does Omega > 1 actually guarantee?

Nothing deterministic—markets are noisy—but it does mean that over your window, cumulative wins above the hurdle exceed cumulative misses, i.e., better-than-target quality.

How should I choose the Target Return?

Anchor it to timeframe and asset. Daily: 0.00–0.10% per bar is common; intraday is smaller. Backtest values that reflect your strategy’s realistic edge.

Should I prefer log returns?

Use log when comparing across assets or dealing with large swings; it treats up/down moves symmetrically. Use linear for small, stable bars where differences are negligible.

Does Omega repaint?

No. It’s a rolling sum over completed bars. Values update intrabar while the bar forms and lock at close—standard indicator behavior.

Why is my Omega chronically low/high?

Your target may be too ambitious/lenient, or your Period too short/long. Raise target or shorten the window to lower readings; lower target or lengthen the window to raise/stabilize them.