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How to evaluate your P&L % Performance for Year End? By Total % or by Average %?

QuestionsCategory: QuestionsHow to evaluate your P&L % Performance for Year End? By Total % or by Average %?
livefire717 asked 4 years ago
Hi Pat and Owen, In evaluating some trades with some winners and losers as part of the 2020 Year End, I began to question how should I evaluate my P&L % performance overall?  I hear a lot of traders talk about their "average", but then others tout they have made hundreds of percentage. Let's say I have 5 stocks that had the following percentage P&L: S1: 15%, S2: 28%, S3: -4%, S4: -1.5%, S5:9% Would I evaluate based upon the total? SUM(+15%+28%-4%-1.5%+9%) = 46.5 % total OR AVERAGE(+15%+28%-4%-1.5%+9%) = 46.5/5 = 9.3% Is there a reason to choose one over the other?  Is the average in this case another way of saying that I could expect (on average) +/- across a set number of trades or over a specific period of time?   Thanks...
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Avatar photoOwen Staff answered 4 years ago

Pat made this video for you:
https://youtu.be/wnqhVHBuByg