Calculating Performance (%)

B

Babak

I know this may be a dumb question but how do you go about calculating your account performance when it isn't cut and dried (start with funds, trade and end with funds)?

What I mean is, when you have additional deposits to your account and/or withdrawals as well as profits/losses during multiple time periods (years)?

Currently I'm using the XIRR function in Excel but I'm not sure if it is correct or perhaps the best way.

With XIRR I start with a negative (starting capital) then put any withdrawals as negatives and any additions as positives. Then the monthly profits/losses from trading are also +/- along with the corresponding dates. Then end with the current acct balance as a positive.

Like this:

11-Apr-01 -$100 starting capital
15-May-01 $55 trading profit
15-Jun-01 -$75 withdrawal
15-Jul-01 $5 trading profit
15-Aug-01 -$75 trading losses
15-Sep-01 $35 addition to acct
15-Oct-01 $20 addition to acct
15-Nov-01 -$12 withdrawal
15-Dec-01 $15 trading profit
31-Dec-02 $120 ending capital
=XIRR(A1:A10,B1:B10)

How do you calculate this?

TIA :)
 
One suggestion: calculate a starting NAV value for your performance. When you add or withdraw money, think of it as buying/selling shares at current NAV value.
 
Quote from Babak:


Like this:

11-Apr-01 -$100 starting capital
15-May-01 $55 trading profit
15-Jun-01 -$75 withdrawal
15-Jul-01 $5 trading profit
15-Aug-01 -$75 trading losses
15-Sep-01 $35 addition to acct
15-Oct-01 $20 addition to acct
15-Nov-01 -$12 withdrawal
15-Dec-01 $15 trading profit
31-Dec-02 $120 ending capital
=XIRR(A1:A10,B1:B10)

How do you calculate this?

TIA :) [/B]
More...


How did you come up with the ending capital at $120? Given those numbers above...:confused:
 
Biog, I was just making an example and plugging in numbers right and left without a care :p

I guess you can say between Dec 15 '01 and Dec 31 '02 there was some more profit/losses. Anyway, it was just an example!! :D
 
Quote from Babak:

Like this:

11-Apr-01 +$100 starting capital
15-May-01 $55 trading profit
15-Jun-01 -$75 withdrawal
15-Jul-01 $5 trading profit
15-Aug-01 -$75 trading losses
15-Sep-01 $35 addition to acct
15-Oct-01 $20 addition to acct
15-Nov-01 -$12 withdrawal
15-Dec-01 $15 trading profit
31-Dec-02 $68 ending capital
=XIRR(A1:A10,B1:B10)

How do you calculate this?

TIA :) [/B]
More...


I changed the 1st and last number for this example of a way to calculate NAV with additions and withdrawals:


11-Apr-01 +$100 starting capital NAV:$10 /10 shares
15-May-01 $55 trading profit NAV: $15.50 /10 shares
15-Jun-01 -$75 withdrawal NAV: $15.50 / 5.16 shares
15-Jul-01 $5 trading profit NAV: $16.47 / 5.16 shares
15-Aug-01 -$75 trading losses NAV: $1.94 / 5.16 shares
15-Sep-01 $35 addition to acct NAV: $1.94 / 23.20 shares
15-Oct-01 $20 addition to acct NAV: $1.94 / 33.51 shares
15-Nov-01 -$12 withdrawal NAV: $1.94 / 27.32 shares
15-Dec-01 $15 trading profit NAV: $2.49 / 27.32 shares
31-Dec-02 $68 ending capital

NAV beginning: $10.00
NAV Ending: $2.49

-75%
:(

Just an idea for calculating...
 
Babak,

Hi. Why do you ignore me? I respectfully asked a question. Even Johnny Rotten answers all questions. I really want to know what happened to your journal. Why did you stop?

Please don't be rude. Thank you.
 
From what I recall reading in the forums, Aaron Schindler seems to have a grasp on how to perform these types of calculations.
 
BABAK- I asked the same questions about a year back. Do a search for that link. Or better yet, just PM Aaron. He answered all my questions on the subject.

Good trading.
 
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