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...