ROE and Performance Indicators
Learn about Copy Trading strategy performance and how to gauge the profit capabilities of a Strategy based on profitability indicators such as ROE, Total Profit and Equity and 24h performance.
There are several key indicators profit indicators when gauging the profit and profit potential of a Strategy, such as:
- Total Profit
- 24 hour performance
- Total Strategy Equity and Trader’s Equity
Let's review each indicator in more detail.
A Strategy’s ROE% or Return on Equity is essentially the net returns of a Strategy since its creation.
A Strategy’s ROE is updated every 5 minutes by default, as well as anytime a Trader closes an active trade. When this occurs, the ROE is updated taking into account the profit/loss of a position as well as the Strategy’s Equity at the time.
When deposits/withdrawals are made by the Trader or Followers, they have an impact on the total Strategy Equity. To account for this, ROE% is calculated as a compound percentage, taking into account all individual Profit /Loss percentages between each consecutive deposit/withdrawal made to/from the Strategy.
This calculation method ensures that ROE% accurately reflects the overall performance of the Strategy, considering the effects of all deposit/withdrawal transactions made by Strategy participants.
Additionally, a ROE% chart can be found on a Strategy's main page:
It provides more depth and information about a Strategy's historical ROE% changes.
The Total Profit indicator is the Total Net Profit of a Strategy since its creation:
This indicator is calculated as the sum of all Profit/Loss values from all trades performed by the Strategy, reflected in the Strategy’s base currency.
The 24hr Performance indicator is the Net Profit of a Strategy for the last 24 hours from the current time:
For example, if it is currently 10:00 UTC, the 24hr Performance indicator will be reflected as the sum of all Profit/Loss values from all trades performed by the Strategy from 10:00 UTC of the previous day to 10:00 UTC of the current day, reflected in the Strategy’s base currency.
When considering a Strategy’s ROE%, it is important to take into account not only Strategy Equity but also Trader’s Equity:
- Trader’s Equity - the Trader’s personal Equity
- Strategy Equity - the total combined Equity of the Strategy, which includes the Trader’s Equity + Followers’ Equity
This indicator can help followers gauge the Trader's commitment and exposure to the success of their Strategy.
At the same time, it is important to keep in mind that the increase of Trader’s Equity due to deposits is not necessarily an indicator of a positive performance by the Strategy and will not directly change the current ROE% of the Strategy.
A Strategy's ROE% can increase/decrease only as a result of Profit/Loss incurred from trades performed by the Strategy