> For the complete documentation index, see [llms.txt](https://docs.candelacharts.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.candelacharts.com/investing/risk-adjusted-performance/sharpe-ratio/usage.md).
# Usage
Sharpe Ratio Usage
Turn Sharpe into a practical gate and sizing tool.
**Quick start**
1. Pick a **calculation TF** (leave blank to use the chart).
2. Set **Lookback** (e.g., 126), **Periods/Year** (252 for daily), and **Risk-free (annual %)**.
3. Keep **Use log returns** on for most assets; turn off for steady names.
4. Enable **Annualize** to compare across markets and managers.
**Playbook**
* **Filter:** Prefer longs while Sharpe ≥ 1; avoid fresh risk when < 0.
* **Size:** Scale positions with the level and stability of Sharpe.
* **Compare:** Use the same settings across a watchlist to rank quality quickly.
* **Adapt:** If readings are noisy, raise lookback or add a small EMA; if too sluggish, do the opposite.
---
# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.
## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation by asking a question.
Perform an HTTP GET request on the following URL with the `ask` and `goal` query parameters:
```
GET https://docs.candelacharts.com/investing/risk-adjusted-performance/sharpe-ratio/usage.md?ask=&goal=
```
`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is what the user is ultimately trying to achieve, the reason they need the answer. Sharing it helps GitBook give you a better, more relevant answer. A goal is most helpful when it describes the outcome the user wants rather than restating the question. For example, with `ask=how do I create an API token`, a goal like `automate deployments from our CI pipeline` lets GitBook tailor the answer to that use case.
The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.
Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.
