Definition
The average percentage profit or loss generated on your long trades.
Formulas
- Stocks: Avg % on Long = (Sum of % Returns on Long Trades) / (Number of Long Trades)
- Forex: Avg % on Long = (Sum of % Returns on Long Trades) / (Number of Long Trades)
Examples
Stocks Example
-
- Trade 1 (Long): Investment of $800, Profit of $200 => 25% return
- Trade 2 (Long): Investment of $1200, Loss of $80 => -6.67% return
- Trade 3 (Long): Investment of $500, Profit of $50 => 10% return
- Avg % on Long: (25% – 6.67% + 10%) / 3 = 9.44%
Forex Example
- Account Balance: $8000
- Trade 1 (Long): Profit of $300 => 3.75% return
- Trade 2 (Long): Profit of $100 => 1.25% return
- Trade 3 (Long): Loss of $200 => -2.5% return
- Avg % on Long: (3.75 + 1.25 – 2.5%) / 3 = 0.83%
Key Points
- Directional Performance: Helps evaluate the performance of your long-sided trades specifically.
Considerations
- Investment vs. Account Balance: The percentage return calculation differs for traditional investments vs. forex trading:
- Traditional Investments: Percentage return is calculated based on the trade’s specific investment.
- Forex: Percentage return is often calculated based on the overall account balance before the trade took place.
