Return measures the change of equity seen in a specific strategy. It is updated with statistics that calculate the change in a strategy’s equity from the beginning to the end of a specified period of time.
Note: The Return is updated roughly every 20 minutes for strategies with Social Standard and Social Pro accounts and once every hour for Pro accounts.
Return calculation
Any balance operations such as deposits, withdrawals, and internal transfers divide the entire period into sub-periods. The rate of return for each period is calculated and multiplied to produce the final rate percentage.
In other words, whenever a strategy provider withdraws or deposits, the return calculation is not influenced at all to prevent artificial results.
Return is constantly updated and compounds over time.
Here’s an example*:
- In January, the strategy’s equity increased from 500 USD (E1) to 600 USD (E2). So January's return is calculated: (600 USD - 500 USD) / 500 USD = 0.2 or 20%
- Then the strategy provider made a 400 USD deposit, and the strategy’s equity is adjusted: 600 USD + 400 USD = 1,000 USD. So the return calculation in February will start not from 600 USD (E2) but from 1,000 USD (E3).
- In February, the strategy’s equity increased from 1,000 USD (E3) to 1,500 USD (E4). We can now calculate February’s return: ( 1,500 USD - 1,000 USD) / 1,000 USD = 0.5 or 50%
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Now we can calculate the overall Return:
K1= January Return + 100%, so K1 = 20% + 100% = 120%
K2 = February Return +100%, so K2 = 50% + 100% = 150%
Return over time= (K1* K2) - 100%, or (120% * 150%) - 100% = 180% - 100% = 80% So Return over time is 80%
Return calculations are strictly made between balance operations (deposits, withdrawals, and internal transfers), of which there is no limit. The use of the months of January and February as a time period is for the purpose of examples only.
The Return from previous months is added into the current calculations.
When a strategy stop out occurs:
- For Pro accounts, the strategy return is calculated to -100% and the strategy is archived.
- For Social Pro and Social Standard accounts, the strategy return is calculated to 0%. The strategy remains active, the strategy provider can deposit, trade, invite investors, and the return will be recalculated based on their activity.
Return graph
The Return graph shows the cumulative return over time. The percentage of profit or loss in an account's balance is shown for a certain period. This graph provides a transparent way to see how strategies have performed historically.
Important: Past performance is not necessarily indicative of future results, so while the return graph is a useful tool, it should be just one of many factors to evaluate a strategy provider.
To display your Return graph for Strategies, follow the steps below.
- Log in to your Social Trading application.
- Select a Strategy.
- Click on the Statistics tab. The Return graph will be displayed.
Investment return drift
When investing in a strategy, there could be differences between the strategy’s return and the Investors’ return. This may be due to the time at which the investment was initiated can affect the investment return. Investment performance could be higher or lower than a strategy performance.