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Real gain calculation Discussion

momentum
Nov 05 2009 at 10:16
6 posts
Hi,

Use Balance as gain calculation is not correct way todo. Look at this example
# Gain:+8.5%
# Abs. Gain: +8.5%
# Daily: 0.15%
# Monthly: 4.52%
# Drawdown: 0.00%
# Balance: $16275.22
# Equity:(53.86%) $8765.52
# Highest: (Nov 03) $16275.22
# Profit: $1275.22
# Interest: -$18.52
# Deposits: $15000.00
# Withdrawals: $0.00

For me we are not up +8.5% but down -40% if I close today.
System that never close trades that are < 0 will have good gain ( on your site) but not good gain if I need to close the account.


Staff (Staff)
Nov 05 2009 at 10:50
1389 posts
Yes, you do have a point there.

But the gain figure is by its nature based on the realized profit/loss, so until the open positions are closed, they're not factored into the gain figure.

This is the reason the equity percentage was introduced, to see the current true value of the balance.

What exactly do you suggest? To add the unrealized gain figure?

momentum
Nov 05 2009 at 11:37
6 posts
hi,

Yes true that 'gain nature based on the realized profit/loss, so until the open positions are closed, they're not factored into the gain figure.'

I suggest you add an 'Close today Gain' that show the value of the account if you need to close the account today or something like that.

Your site is good and lot of 'Forex beginners' seeks for systems on your site. I just want to avoid that people think they have 'golden egg' when they get an 'egg with dynamite ' :D

True Example:
When I started with forex I used a 'grid system' that I found on internet ( paid 1000 USD !! ). My balance get from 10 000 USD to 30 000 USD quickly but I didn't see that my 'true' value decrease and when audnzd moved quickly I lost all my account.

momentum
Nov 05 2009 at 21:20
6 posts
Real Gain on such system would not show +265. % ( Btw no update since 20-oct so maybe 'touch down for it' like I did on my account)

    * Gain:+265.21%
    * Abs. Gain: +265.2%
    * Daily: 2.01%
    * Monthly: 59.87%
    * Drawdown: 0.30%
    * Balance:
    * Equity:(26.72%)
    * Highest:
    * Profit:
    * Interest:
    * Deposits:
    * Withdrawals:
    * Updated:Oct 20 at 8:38 AM
    * Tracking:5

Staff (Staff)
Nov 06 2009 at 09:57
1389 posts
Thanks for the suggestion momentum!

andreilupusoru (andreilupusoru)
Nov 14 2009 at 12:25
6 posts
You also shouldn't take into account as growth the deposits and withdrawals

Staff (Staff)
Nov 14 2009 at 12:28
1389 posts
Andrei, you're correct. The growth is not affected by deposits nor withdrawals.

pinball (pinball)
Nov 16 2009 at 01:33
159 posts
The equity percentage cannot be used to evaluate true system performance.

This is the myfxbook info on my system8 (updated today)

Gain: +1.59%
Abs. Gain: +9.81%
Daily: 0.01%
Monthly: 0.18%
Drawdown: 0.10%
Balance: €1247.21
Equity: -
Highest: (Nov 15) €1247.45
Profit: €3.17
Interest:€150.74
Deposits: €1569.10
Withdrawals:-€409.57

This is the info from oanda

Balance 1,247.21
Unrealized P&L 3,946.64
Unrealized P&L% 316.41
Net Asset Value 5,193.52

Looking at myfxbook numbers, it is not easily seen that the system is in fact up 300%+ on open positions
Net asset value is 5193, balance is 1247

A very close estimate of the NetAssetValue could (with some effort) be calculated from open positions from last retrieval, if you store the current forex value of the positions held, as of the time you got data from the broker.

Going forward, you could actually graph balance and net asset value in a third graph, with 3 lines, one balance, one value of open positions, and one the sum of the two. You would need to store NAV each time you fetch data from the broker.

Regards,

Dennis Fantoni

While writing my system8 grew to 5197 happy days lol

knowledge as well as smarts are needed to make money.
Emanuelh
Nov 01 2011 at 20:55
2 posts
I dont understand these calcualtions either.
-On 0ne Account I have the Gain% is negative, when in fact I am positive, which the abs Gain% shows.
-On the same account the balance is all screwed up and shows numbers it never even reached not even with floating profits.
-On two accounts I am making serious negative pips, while I am making money.

Can anyone explain how this is possible? The pips I understand that's just my strategy's downfall. But the balance and the gain% I do not understand.

Thanks in advance

small gains add up
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