ROI
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Morning all, sorry for all my questions, but as my journey progresses I come up against new things I need to know about.
My question is how do I calculate my ROI, if I give you my findings from a paper trade I've been doing can someone work it out for me and explain how to do it please, also what is a good ROI%
I've not finished testing this strategy yet but as I go on there's things I'd like to know so I can understand more and more as I go.
Total paper staked £244 total paper profit £38.4 -
I would calculate ROI by dividing the net profit by the amount staked so £38.4 / £244 = 15.7%.
Over the long term a 10% ROI would be very good as far as I'm concerned but you'd need to take into account the number of bets/trades. -
@Arran-Shackell I do ROI per bet as does the horse software but bankroll roi is different.
ROI per bet is handy for seeing if a system is profitable but not when comparing to saving rates which are usually yearly figures. You could place 10,000 bets in a year and your 1-2% roi per bet would make a lot of profit. However, when you invest or use a savings account you tend to get only 5% total profit on that amount in 12 months maximum.
A better way to calculate true ROI may be to compare it to your bankroll.
So for example say I was using £100 bankroll with £1 stakes. A £38 profit would give me £138 which would be a 38% increase.
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Just for the benchmark best easy access savings account is 5.22% at the moment according to money saving expert.
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@Simon-Bates I think that ROI is equal to the amount staked divided by profit, so in this case the ROI is 244/38.4 = 6.35%.
I'm putting it out there, as this is how I work out my ROI, so if I'm wrong someone else will tell me and I'll have learnt something too!
As far as what a "good" ROI is - no idea. One might say that any return on investment at all is good but I'd be interested to know what the gurus think. My SHG strategy is currently running a tiny bit below 8% (if I have the calculation right!)
