Avg % on Winners (Average Percentage Return on Winning Trades)

Definition
The average percentage profit generated on your winning trades.

Formulas

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

Examples
Stocks Example

• Trade 1: Investment of $500, Profit of $120 => 24% return
• Trade 2: Investment of $2000, Profit of $500 => 25% return
• Trade 3: Investment of $800, Profit of $100 => 12.5% return
• Avg % on Winners: (24% + 25% + 12.5%) / 3 = 20.5%

Forex Example

• Account Balance: $10,000
• Trade 1: Profit of $400 => 4% return
• Trade 2: Profit of $800 => 8% return
• Trade 3: Profit of $250 => 2.5% return
• Avg % on Winners: (4% + 8% + 2.5%) / 3 = 4.83%

Key Points

• Winning Strategy Assessment: Helps evaluate how profitable your winning trades are on a percentage basis.

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.