What's a decent Profit / Turnover figure on a strategy?

[Derek27]

Answer still seems to be to calculate whatever you want for your own use, but it's pointless comparing your apples with other people's oranges.

The factor nobody has mentioned is time, all measures of performance require it. if I made £100 by turning over 10grand in an hour then that's better than if i'd previously taken all day to do it. Both have the same return but the former has earned me 7 hrs to do whatever I want, trading or otherwise. Where's the value of that in the calcs?

I have a spreadsheet that calculates my daily compounded and monthly profit on capital. It makes great reading if I make a few percent on New Year's day and see how many £Bs I'm projected to make for the year and I can enjoy a pipe dream for a few days.

[Derek27]

I am not sure where risk has come into this as ROI is all about measuring return or ‘performance’.

I agree that a 3k outright bet is very different to 3k trading but you would never compare the two, this is all about comparing similar strategies or measuring the change in performance for a single strategy over time.

The 'I' stands for investment, which implies money put at risk. It's possible to put £1K in an inactive market where you could easily scratch the trade without risking much, so trading turnover can be quite misleading.

For evaluating performance, profit on capital allocated to a particular strategy could be a better measure.

How do you measure your performance over time?

Raw profit is the best guide. There is no really accurate way as even comparing profits or profit percentages for the same month or quarter last year can be affected by abandonments due to weather, changing markets, reductions in market turnover, etc.

[ruthlessimon]

All about balance between the big 3:

1. Edge (Profit/Turnover)
2. Frequency
3. Scale

Edge * Frequency * Scale = Profit

Now it's tricky to improve an edge, & it doesn't necessarily mean it's worth the pain; here's why

I'm gonna make my entry criteria harder to trigger (1 = easy to trigger, 12 = hard to trigger).

Notice how I can choose to "improve my edge" - at the cost of 50% profitability. Worth it?

Further to that I've sacrificed half of all my entries (trade frequency is down 50%); this will be tricky to handle mentally, & also brings up questions as to whether the sample is even big enough to be valid.