Return is a percentage that indicates how much money a trader has earned relative to their initial deposit, using a calculation known as the Time-Weighted Rate of Return (TWRR).
How is it calculated?
The Time-Weighted Rate of Return formula is used, which measures the actual return on managed capital, unaffected by subsequent deposits or withdrawals.
This means that:
It doesn't matter whether the trader adds or withdraws funds during the period.
The focus is on pure trading performance.
What does the percentage represent?
The Return on Investment tells you how profitable a strategy has been:
🔺 A +25% return means the trader has generated a 25% profit on their initial deposit.
🔻 A -10% return indicates the trader has lost 10% of their initial investment.
📌 This figure does not reflect a fixed amount of money, but rather a proportion of growth or loss.