The Rachev Ratio takes the expected tail return and divides it by the expected tail loss. Since its dividing expected return by a measurement of risk, higher is always better.

The 1% expected tail return would be divided by the 99% expected tail loss. The 5% expected tail return would be divided by the 95% expected tail loss, and the 10% expected tail return would be divided by the 90% expected tail loss. Essentially, you want to subtract the percentage expected tail return from 100%, and that will give you the expected tail loss percentage in the denominator. In all cases, use the same time period to get accurate results.

American Markets Analysis:

• Summaries of American Economic Structure
• Performance of Major
• Imports/Exports
• Federal Reserve Mandate versus Expectations
• Performance Indexes of U.S Economy
• Economically Correlated U.S Dollar Projections
• Large Trading Fund Index Sentiment Readings
• Market Wide Earnings Versus Valuations
• Fundamental Ranking of U.S Business Sectors
• Best and Worst Future Consensus Estimates
• Occasional: Firm Fundamental Strength Report
• List of Technicals to Look for While Trading