The first step in evaluating a financial trading strategy is assessing its risk management approach. Ensure that the strategy includes clear guidelines on stop-loss limits, position sizes, and risk-to-reward ratios. Volatility can fluctuate rapidly, and a solid risk management plan can minimize losses during market downturns.

It’s essential to assess how the strategy performs under different market conditions. Strategies that work well in a trending market may not be as effective during sideways or choppy market conditions. Testing the strategy across various timeframes and market environments helps determine its robustness.

A strategy’s historical performance offers valuable insights. Review how it has performed in the past, particularly during periods of high volatility. Historical data can provide a framework for understanding potential outcomes, but it's important to remember that past performance doesn’t guarantee future results.