Avg % on Shorts (Average Percentage Return on Short Trades)

Definition
The average percentage profit or loss generated on your short trades.

Formulas

• Stocks: Avg % on Shorts = (Sum of % Returns on Short Trades) / (Number of Short Trades)
• Forex: Avg % on Shorts = (Sum of % Returns on Short Trades) / (Number of Short Trades)

Examples
Stocks Example

• Trade 1 (Short): Investment of $2000, Profit of $300 => 15% return
• Trade 2 (Short): Investment of $1500, Loss of $100 => -6.67% return
• Trade 3 (Short): Investment of $800, Profit of $40 => 5% return
• Avg % on Shorts: (15% – 6.67% + 5%) / 3 = 4.44%

Forex Example

• Account Balance: $6000
• Trade 1 (Short): Profit of $250 => 4.17% return
• Trade 2 (Short): Loss of $150 => -2.5% return
• Trade 3 (Short): Profit of $100 => 1.67% return
• Avg % on Shorts: (4.17 – 2.5 + 1.67%) / 3 = 1.11%

Key Points

• Directional Performance: Helps evaluate the performance of your short-selling 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.