Strategy Profit indicators and how they're calculated

Let’s take a look at the 2 main Strategy Profit indicators and how they're calculated - Total Profit % and Today’s Profit %.

Total Profit %

In the simplest case, Total Profit % indicator reflects the percentage change of the Manager's Equity - if the manager didn't deposit to or withdraw funds from the Strategy account.

However, if there were Deposits/Withdrawals made by the manager to/from the Strategy, they would also affect Manager's Equity of the Strategy. In this case, Total Profit % is calculated as a compound percentage of all separate Profit or Loss percentages of all periods between one deposit/withdrawal to the next one.

Change of Manager’s Equity is NOT an Indicator of Strategy Performance

It is important to note that Manager’s Equity of a Strategy may change due to deposits or withdrawals of funds from the Strategy by the Manager, without any trading. Such deposits or withdrawals do not affect profitability (Profit %).

A Strategy’s Profit % may change only as a result of Manager’s trading activity, either profitable or unprofitable.

A deposit by the Manager to the Strategy will increase Manager’s Equity but won’t change Profit % of the Strategy. Similarly, a withdrawal of funds by the Manager will reduce Manager’s Equity but won’t change Profit % of the Strategy.

This explains why you may see, for example, a significant increase or decrease of Manager’s Equity that seems not to be reflected in Profit %: this would indicate that the Equity change was due to moving funds to/from the Strategy, NOT due to trading.

The following examples elaborate on different scenarios of deposits, withdrawals, and trades by a Manager in a Strategy:

Example 1: Deposits Don't Change Profit %:

Consider a Strategy with the following indicators:

  • Initial Manager’s Equity: 1.0 BTC

  • Current Manager’s Equity: 1.5 BTC

  • Profit %: 50%

📥 If the Manager deposits 0.5 BTC to their Strategy:

  • Manager’s Equity will increase: 1.5 ↗ 2.0 BTC

  • Profit % will remain at: 50% ➡ 50%

↔️ Thus the deposit wouldn't change Profit %. 📈 However, you will see an increase in Manager’s Equity upon the deposit.

Example 2: Withdrawals Don't Change Profit %:

Again, lets consider a Strategy with the same indicators as in Example 1:

  • Initial Manager’s Equity: 1.0 BTC

  • Current Manager’s Equity: 1.5 BTC

  • Profit %: 50%

📤 If the Manager withdraws 0.5 BTC from their Strategy:

  • Manager’s Equity will decrease: 1.5 ↘ 1.0 BTC

  • Profit % will remain at: 50% ➡ 50%

↔️ Thus the withdrawal wouldn't change Profit %. 📉 However, you will see that Manager’s Equity reduced upon the withdrawal.

Example 3: Change of Manager's Equity alone isn't an indicator of increase of Profit %

The following example along with an explanation would be useful for Strategy Managers who want to understand how their Strategy Profit % would be affected by their deposits and withdrawals.

In this example:

  1. A Manager created a Strategy with an Initial Equity of $100. 📈 They made a profit of $50 (+50%): the Strategy's Equity became $150.

  2. 📥 The Manager then deposited an additional $100, bringing the Equity to $250. 📈 After this, the Manager earned an additional $50 in profit. However, this $50 profit was made on top of the Equity of $250 after the last deposit, thus it was a 20% profit. Compounded with (not added to!) the previous 50%, the Total Profit % became 80% — see calculations in the table below.

  3. 📤 The Manager then withdrew $200 from the Strategy, leaving it with $100 Equity. 📉 They further suffered a loss of -$50 or -50%. Compounded with (again, not added to!) the previous +80%, the Total Profit % became -10% — see calculations in the table.

Deposit (+) or Withdrawal (-)

Equity after D/W

P/L in the selected period

Total P/L, $

Profit % in the selected period

Compound Product

Total Profit,

%

1.Initial Equity: $100

$100

+$50 📈

+$50

+50%

1.5

+50%

2.Deposit: +$100 📥

$250

+$50 📈

+$100

+20%

1.5*1.2=1.8

+80%

3.Withdrawal: -$200 📤

$100

-$50 📉

+$50

-50%

1.8*0.5=0.9

-10%

It is important to note that in this example the Total Profit earned was +$50 (positive), but Total Profit % was -10% (negative).

If you're a Follower and need to understand the profitability of your Following - ignore the Strategy Manager's Equity and pay attention to your Profit % of the Following in your Portfolio.

Today's Profit %

Today’s Profit % indicator reflects the change in Equity since the start of the current day (as opposed to the change of Initial Equity).

Example 4:

  1. A Strategy manager allocated $100 toward his Strategy. This is the Initial Equity.

  2. The Strategy manager has traded for some time and has made a $60 profit (60%). The Equity of the Strategy has already grown from $100 to $160. The Total Profit % = 60%

  3. The trader decides to trade again and makes a $5 profit bringing their Equity to $165.

The $5 increase in Equity from $160 to $165 will result in:

  • Increase of initial $100 Equity by $5 = 5% increase of Total Profit %

  • Increase of today's Equity by $5 from $160 = 3.12% increase in Today's Profit % (because $5 is 3.12% from $160)

Based on the information above, when reviewing Strategy statistics it is important to keep in mind that Total Profit % and Today's Profit % are different indicators the value of which will differ from one another based on numerous factors:

  • Initial Equity of a Strategy

  • Deposits to a Strategy

  • Withdrawals from a Strategy

  • Equity changes due to realized and unrealized P/L, trade fees and overnight financing