How do I do this when trading, say on a daily basis. Is it based on the amount I have returned in profit over my bank, or is it how much money i put at risk in the market. ?
So if i am using £10 stakes, on a bank of £500. with a daily profit of £10 for example
Calculating ROI
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tomallen123
- Posts: 113
- Joined: Mon Nov 01, 2010 1:52 pm
It depends on what you want to know?
Do you want to know the ROI on all the trades you've done or do you want to know how the ROI on your bank?
Do you want to know the ROI on all the trades you've done or do you want to know how the ROI on your bank?
I guess what i really want to know is which is the most important figure. Is it the return against my over all bank, or what i am risking on a trade. For example if i am trading with £10 and just putting the same £10 in and out of the market and my risk is defined by what i stand to lose on the trade but my 'investment' is a lot lower than the size of my bank
I remember asking this question a while ago too, as it can be difficult to work out compared to traditional betting, where working out ROI is simply just working out what the percentage of your profits are compared to your stakes.
I would say it doesnt really matter how you do it, just as long as you do it consistently. There are loads of different ways of doing it. Just find the best for you, then keep doing it that way, then it is easy to compare going forward.
It can get complicated, especially when you try to factor in things like scratch trades etc. Some races you might only go in and out of the market once, other races you might be in and out 10,20,30,40 times etc, and both races you may end up making roughly the same amount.For that reason i find it difficult to get a true figure for ROI when trading.
Just find what is easiest for you to do, and then you can compare yourself to yourself going forward and see any improvement or see what works best. I find it pointless trying to compare your ROI to other traders, as it all depends how they are working it out.
I would say it doesnt really matter how you do it, just as long as you do it consistently. There are loads of different ways of doing it. Just find the best for you, then keep doing it that way, then it is easy to compare going forward.
It can get complicated, especially when you try to factor in things like scratch trades etc. Some races you might only go in and out of the market once, other races you might be in and out 10,20,30,40 times etc, and both races you may end up making roughly the same amount.For that reason i find it difficult to get a true figure for ROI when trading.
Just find what is easiest for you to do, and then you can compare yourself to yourself going forward and see any improvement or see what works best. I find it pointless trying to compare your ROI to other traders, as it all depends how they are working it out.
As stated above i base it on my bank for two reasons.
1st - using different stakes on each race then taking the time to work out the ROI on each individual one or even the total put through that markets is very time consuming.
2nd - most importantly i think of it the same way as if i was to put my money in a high street bank.
If i deposited 1k whats my intrest and therefore ROI over a month, quarter or year going to be?
If i put the same 1k in betfair i can see if i am getting a better ROI having my money there.
1st - using different stakes on each race then taking the time to work out the ROI on each individual one or even the total put through that markets is very time consuming.
2nd - most importantly i think of it the same way as if i was to put my money in a high street bank.
If i deposited 1k whats my intrest and therefore ROI over a month, quarter or year going to be?
If i put the same 1k in betfair i can see if i am getting a better ROI having my money there.
I think about this differently. I think about the amount I risk and the return I aim for. And I also think of the size of the market and the amount of profit I can achieve from the market. There is only a certain amount of profit available to me from a market. So I am always trying to optimise my strategy to the market.
I've tended to use a number of measurements over the years. These include strike rate so I can tell how effective my trading as, but I also tend to use ROI on turnover. If this number declines that I can tell that my strategy is beginning to fail and I need to modify some aspect of it to raise it higher.
I think it's probably legitimate to use ROI on your bank and profit for the day, but I think that ROI on turnover is probably a more effective measure. You can produce stunning ROIs on your bank over the course of the day, but of course this doesn't reflect the amount of risk that you took in order to do that.
I think it's probably legitimate to use ROI on your bank and profit for the day, but I think that ROI on turnover is probably a more effective measure. You can produce stunning ROIs on your bank over the course of the day, but of course this doesn't reflect the amount of risk that you took in order to do that.
Yes my aim is to make the most for the least possible risk. But also aware that risk and return are correlatedEuler wrote:
I think it's probably legitimate to use ROI on your bank and profit for the day, but I think that ROI on turnover is probably a more effective measure. You can produce stunning ROIs on your bank over the course of the day, but of course this doesn't reflect the amount of risk that you took in order to do that.