Keeping track of finances

[CherryP]

Hi

I notice people regularly talk about how much they have made per year in percentage terms for example "I made 20 % return last year"

Can anyone tell me how they calculate this

Is is a simple calculation of capital invested / return on investment

Taking return on investment calculated from gains made from dividends and shares sold minus trading costs and losses ( if any)

Many thanks

 

[malaguti]

Hi

I notice people regularly talk about how much they have made per year in percentage terms for example "I made 20 % return last year"

Can anyone tell me how they calculate this

Is is a simple calculation of capital invested / return on investment

Taking return on investment calculated from gains made from dividends and shares sold minus trading costs and losses ( if any)

Many thanks

Its very simple Cherry
You're starting capital today is 10,000 you make 1000 today your % return is 1,000/10,000 gives you 10% return today ie (0.1 x 100)
Tomorrow your capital will be 11,000 and you make another 1000 your % return then is 1000/11000 gives you a 9% return the next day.
Your overall capital return is 2,000 and initial capital was 10,000 so thats a 20% return in total.
Were you to included costs in this calculation, you would simply deduct from your 1,000 return and repeat the calculation

hope this helps

 

[CherryP]

Its very simple Cherry
You're starting capital today is 10,000 you make 1000 today your % return is 1,000/10,000 gives you 10% return today ie (0.1 x 100)
Tomorrow your capital will be 11,000 and you make another 1000 your % return then is 1000/11000 gives you a 9% return the next day.
Your overall capital return is 2,000 and initial capital was 10,000 so thats a 20% return in total.
Were you to included costs in this calculation, you would simply deduct from your 1,000 return and repeat the calculation

hope this helps

Dear Malaguti

Thank you for this

So if I have understood what you are saying after day one you are rolling this figure the 11,000 over to the following day (day 2) and then calculating the return on this To give you the day 2 figure . Then separately you are calculating total return based on what you have made from both days ( in your example this being the 2000) yes I can see that the costs come of of the 2000.

Many thanks

 

[malaguti]

Dear Malaguti

Thank you for this

So if I have understood what you are saying after day one you are rolling this figure the 11,000 over to the following day (day 2) and then calculating the return on this To give you the day 2 figure . Then separately you are calculating total return based on what you have made from both days ( in your example this being the 2000) yes I can see that the costs come of of the 2000.

Many thanks

thats right Cherry

 

[robertofx]

Hi

I notice people regularly talk about how much they have made per year in percentage terms for example "I made 20 % return last year"

Can anyone tell me how they calculate this

Is is a simple calculation of capital invested / return on investment

Taking return on investment calculated from gains made from dividends and shares sold minus trading costs and losses ( if any)

Many thanks

I think this is up to you. You can decide and add factors to determine your ROI.

 

[CityMasterTrader]

Hi

I notice people regularly talk about how much they have made per year in percentage terms for example "I made 20 % return last year"

Can anyone tell me how they calculate this

Is is a simple calculation of capital invested / return on investment

Taking return on investment calculated from gains made from dividends and shares sold minus trading costs and losses ( if any)

Many thanks

Correct. Say you started with £10K as a trading pot and had £12K at the end of the year, you would have made £2K and thus a 20% return. What you finish the year with should include all profits and dividends and be net of all losses and trading costs. Make sure you look at costs in comparison to profits to make sure you’re not paying too much for what you are doing.

 

[NVP]

Hi

I notice people regularly talk about how much they have made per year in percentage terms for example "I made 20 % return last year"

Can anyone tell me how they calculate this

Many thanks

well if its above realistic percentages ...........they made it up

N

 

[NVP]

Its very simple Cherry
You're starting capital today is 10,000 you make 1000 today your % return is 1,000/10,000 gives you 10% return today ie (0.1 x 100)
Tomorrow your capital will be 11,000 and you make another 1000 your % return then is 1000/11000 gives you a 9% return the next day.
Your overall capital return is 2,000 and initial capital was 10,000 so thats a 20% return in total.
Were you to included costs in this calculation, you would simply deduct from your 1,000 return and repeat the calculation

hope this helps

and dont forget to add in any live trades that have unrealised profits /losses .....

the unrealised losses seem to not appear on most Vendors statements

N

 

[ffsear]

There's 2 ways of looking at it. (that i know of)

Lets say you had £50,000 in an account, risked 2% per trade, made 150 trades across the course a year and the account stood at £60,000 at the end of the year (so £10,000 profit).

1) 10,000 profit on a 50,000 account is 20% profit.

2) 10,000 profit on 150,000 risked in the market (150 trades risking 1,000 each) is 6.66%

I have always used the 2nd method as it takes risk into account.