Pipeline:
Model predicts next price for each timestep Generate trading signals from predictions (e.g., "buy if predicted price > current price") Simulate trades over historical data Calculate P&L and risk metrics from the simulated returns Example:
Then compute:
Sharpe Ratio = Mean return / Std dev of returns Sortino Ratio = Mean return / Std dev of downside returns Max Drawdown = Largest peak-to-trough decline VaR = Worst 5th percentile loss