I'm currently reading "Smarter Trading" by Haufman. He defines risk as volatility, measured by standard deviation. Volatility = Risk seems to be the common approach from everything I've read on trading. For example - max drawdown is often equated with risk, and that's nothing more than a measure of volatility.

But here is what I can't get out of my mind - shouldn't we be much more concerned with the likelihood that a system will recover than we are with how volitile the equity curve is? I would much rather trade a volatile system with an 95% chance of recovering from any drawdown than a smooth system with a 70% chance of recovering from any drawdown (other factors being equal).

Are there any useful metrics out there that measure a systems ability to recover from drawdown (without caring how volatile the thing is?)

Are there any other basic approaches to defining risk?

Thanks in advance.

James

But here is what I can't get out of my mind - shouldn't we be much more concerned with the likelihood that a system will recover than we are with how volitile the equity curve is? I would much rather trade a volatile system with an 95% chance of recovering from any drawdown than a smooth system with a 70% chance of recovering from any drawdown (other factors being equal).

Are there any useful metrics out there that measure a systems ability to recover from drawdown (without caring how volatile the thing is?)

Are there any other basic approaches to defining risk?

Thanks in advance.

James