Definition
The average dollar amount of profit or loss generated per trade over a specified period.
Formula
Avg Return $ = (Sum of Returns on All Trades) / (Total Number of Trades)
Example
Let’s say you made the following trades over a week:
- Trade 1: Profit of $200
- Trade 2: Loss of $75
- Trade 3: Profit of $150
- Trade 4: Loss of $100
- Trade 5: Profit of $50
Your Avg Return $ would be: ($200 – $75 + $150 – $100 + $50) / 5 = $60
Key Points
- Strategy Performance: Provides an overall picture of the typical profit or loss you generate per trade.
