How Do I Calculate My Monthly Return?

I usually only calculate my profit / loss in pips without taking into
consideration actual return.  As most of you know, a 1 pip profit in
the GBP/USD gives you a larger profit than a 1 pip profit in the
USD/CHF.  Therefore using pips as the sole indicator of success is not
complete.  To make it complete, it might be best to start calculating
monthly return based on balance.

To calculate your month end return, follow this example which
applies to calculating profit for January 2007.  I am using fictional
amounts that calculate to my true return for January 2007:

1. What was your balance on January 1st before any trade/interest activity for the day?  Mine was $26231.04
2. What was your balance on February 1st before any trade/interest activity for the day? Mine was $27317.07
3. Calculate: ((February 1st balance - January 1st balance) / January 1st balance) * 100

          (($27317.07 - $26231.04) / $26231.04) * 100) = 4.14 % return for January '07

Popularity: 4%

How Do I Calculate My Monthly Return?

I usually only calculate my profit / loss in pips without taking into consideration actual return.  As most of you know, a 1 pip profit in the GBP/USD gives you a larger profit than a 1 pip profit in the USD/CHF.  Therefore using pips as the sole indicator of success is not complete.  To make it complete, it might be best to start calculating monthly return based on balance.

To calculate your month end return, follow this example which applies to calculating profit for January 2007.  I am using fictional amounts that calculate to my true return for January 2007:

1. What was your balance on January 1st before any trade/interest activity for the day?  Mine was $26231.04
2. What was your balance on February 1st before any trade/interest activity for the day? Mine was $27317.07
3. Calculate: ((February 1st balance - January 1st balance) / January 1st balance) * 100

          (($27317.07 - $26231.04) / $26231.04) * 100) = 4.14 % return for January '07

Any questions or comments, let me know. 

Popularity: 2%