Ranking Points vs Elo: How Traders Should Be Rated
Elo works for chess duels; trading leagues need something else. Why PWR uses ATP-style ranking points instead of Elo or Glicko — and what that means for you.
There are two classic ways to rate competitors. Elo-type ratings (and their successor, Glicko) estimate a player's strength from wins and losses against opponents. Ranking-point systems add up points earned at events of different weight, the way tennis and golf rank players.
The PnL World Rating (PWR) uses ranking points. This article explains the difference and why it fits competitive trading better.
How Elo works
Elo was designed for chess, where every game has two players and one result.
- Each player has a rating.
- Before a game, the ratings predict an expected score.
- After the game, ratings move by the difference between the actual and expected result: beat a stronger player and you gain a lot; beat a weaker one and you gain little.
Over many games, a player's rating converges on their true strength. Glicko adds a measure of uncertainty, so new or inactive players move faster.
How ranking points work
Tennis (ATP and WTA) and golf (the Official World Golf Ranking) rank players very differently:
- Events have tiers: a Grand Slam is worth far more than a small tournament.
- Points depend on how far you went in the event: the winner takes the most, and the curve falls steeply down the field.
- A player's ranking is the sum of points from their results.
Why Elo is a poor fit for trading tournaments
Trading tournaments are fields, not duels. A tournament with 50 traders is one result with 50 places. Elo can be stretched to fields by treating them as many pairwise games, but the logic gets heavy and hard to explain.
Event weight matters. A Monthly Major and an Hourly tournament are not the same achievement. Elo treats a game as a game; ranking points carry the weight of the event directly.
Big wins should move the rating. Elo deliberately moves in small steps. A ranking-point system lets a major win make a major jump — which is what a sport's calendar is built around.
Players need to understand it. "First place in a Monthly Major is worth 1,000 points, times the strength of the field" can be checked by anyone. An Elo update after a 50-trader field cannot.
What PWR takes from Elo
Elo's best idea is that beating strong opponents counts more. PWR keeps it through field strength: every result is multiplied by a factor that grows with the rating level of your opponents, the share of verified traders among them, and the size of the field.
The two systems side by side
| Elo / Glicko | Ranking points (PWR) | |
|---|---|---|
| Built for | one-on-one games | events with fields |
| Event weight | none | tiered by format |
| One big win | small step | big jump |
| Strong opponents | core of the formula | field-strength multiplier |
| Can rating fall? | yes, after losses | no — points are only added |
| Easy to verify? | hard | yes |
What this means for you
- Every rated finish adds points, the most for the top places.
- Long formats decide the ranking: one Monthly Major win equals forty Hourly wins.
- Strong fields pay more, so the best tournaments to play are the deepest ones.
- You can't lose points. Weak results add little; inactivity adds a mark, not a penalty. Current form shows on the Today, Week and Month boards.
FAQ
Is Elo more accurate? For predicting the result of a one-on-one game, Elo is excellent. For ranking a league of tournaments of different weight, ranking points are clearer and reward the right things.
Why can't my PWR go down? Because it is a career total. A bad tournament simply adds few points — like a first-round exit in tennis.
Will the format weights change? They are published, and any change is announced in advance — never applied silently.
PnL World tournaments are simulated: trades are executed against live market data, but no real-money positions are opened on any exchange. Nothing here is financial advice.
Next: PnL World Rating (PWR) explained · How to rank traders fairly