FX Blue - FAQ: Why isn't my % return simply profit divided by deposits?

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Why isn't my % return simply profit divided by deposits?

If you have multiple deposits, or deposits and withdrawals, then your percentage returns (total, per month etc) are not simply your trading profit divided by the total of deposits.

For example: you deposit $5000 and make a loss of $1000 (20%). You then deposit another $6000 (giving a balance of $10,000) and make a profit of $1500, i.e. 15%. You have made a cash profit of $500 overall, but your percentage return is negative: you lost 20% in the first period and only gained 15% in the second. The site will calculate this as a net loss of 8% (0.80 x 1.15 = 0.92).

(You should also bear in mind that profit and loss percentages are not symmetric. For example, if you lose 20% - e.g. $200 of $1000 - then you need a profit of 25% to return to break-even - a profit of $200 on the remaining $800.)

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