How is Signal Growth YTD calculated?

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dbuckle
192
dbuckle  

On the signal details page, on the Growth tab there are percentages on the right in the YTD column.  

‌‌Lets look at [name of the signal was deleted by moderator] signal as an example:

F‌or 2017, how do you get 20.89% ?  It can't be just the sum of Jan, Feb, Mar since that totals 19.78.

‌‌In the same way, how is the Total of 3038.84% reached when the YTD figures are 238.13, 667.89, 20.89 ?

‌‌What am I missing?

‌Thanks in advance.

Fernando Carreiro
4360
Fernando Carreiro  

dbuckle: On the signal details page, on the Growth tab there are percentages on the right in the YTD column.

F‌or 2017, how do you get 20.89% ?  It can't be just the sum of Jan, Feb, Mar since that totals 19.78.

‌‌In the same way, how is the Total of 3038.84% reached when the YTD figures are 238.13, 667.89, 20.89 ?

‌‌What am I missing?

Could they be calculating it in Compound form and not in Simple form?

EDIT: Just tested it, and it is indeed in Compound form and not in Simple form.‌

Example for 2017: ( (1 + 10.25%) * (1 + 7.99% ) * (1 + 1.54%)‌ - 1 ) = 20.89%

Alternative representation: ( (100% + 10.25%) * (100% + 7.99% ) * (100% + 1.54%)‌ - 100% ) = 20.89%

EDIT2: The Compound formula is the correct way to calculate things because each month's gain compounds onto the previous month's gain.

Alain Verleyen
36042
Alain Verleyen  

https://www.mql5.com/en/forum/10773#q23


How is the Growth in Signals Calculated?
The growth shows how the balance of an account grows. It is calculated so that the influence of deposits and withdrawals is avoided.

The entire trade history of an account is divided into periods between balance operations (deposits and withdrawals). First, the total growth coefficient (K) is calculated by multiplying the growth coefficients computed for each period between the balance operations (BO) and then the growth in percentage terms is calculated.

Growth Coefficient К = (Balance before BO1/Initial Deposit) * (Balance before BO2/Balance after BO1 * ... * Balance before BOn/Balance after BOn-1)

Growth in Percentage Terms = (К - 1) * 100%

On the chart below, the balance operations are marked with big red dots and the dashed lines indicate the periods of growth calculation:


Growth Calcualtion

In this case, the total growth for the account is calculated as follows:
Growth Coefficient К = К1 * K2 * K3 = (6 615/10 000 * 17 847/11 115 * 15 547/14 847) = 1.1

Growth in Percentage Terms = (K-1) * 100% = (1.1 - 1) * 100 = 10%

Despite the current balance is about 50% higher than the initial deposit, the real growth due to trade operations is only 10%.

Fernando Carreiro
4360
Fernando Carreiro  
Alain Verleyen: https://www.mql5.com/en/forum/10773#q23

How is the Growth in Signals Calculated?
The growth shows how the balance of an account grows. It is calculated so that the influence of deposits and withdrawals is avoided.

The entire trade history of an account is divided into periods between balance operations (deposits and withdrawals). First, the total growth coefficient (K) is calculated by multiplying the growth coefficients computed for each period between the balance operations (BO) and then the growth in percentage terms is calculated.

On the chart below, the balance operations are marked with big red dots and the dashed lines indicate the periods of growth calculation:

In this case, the total growth for the account is calculated as follows:
Despite the current balance is about 50% higher than the initial deposit, the real growth due to trade operations is only 10%.‌

Actually, I think you may have copied the wrong section because the more appropriate answer, as per the OP's query "How is Signal Growth YTD calculated?", comes from point 24 of that very link (and I quote):

24. How is the year-to-date growth (YTD) calculated, if a sum of monthly growths differs from this value?

We use a compound rate when calculating YTD. This means that the YTD rate is calculated not by a simple addition of growth for several periods of time, but by their multiplication. Every period growth is superimposed on total cumulative growth of previous periods. This can be shown by an example.


In 2014 the signal had following monthly growth values:

  January
February
 March April
 May
June
July
August
September
October
November
December
 Annual data
 Growth, % 14.71
20.51
20.43
12.77
0.18
-
195.28
-
-
130.00 30.55 12.48 1 776
 Growth ratio for the period
 1.1471  1.2051 1.2043
 1.1277 1.0018
 1  2.9528  1 1
 2.3000  1.3055  1.1248 18.76
 Total growth ratio for the period  1.1471  1.3823  1.6648  1.8774  1.8808  1.8808  5.5535  5.5535  5.5535  12.7731  16.6753  18.7563  
  1. There was 14.71% growth in January. That means that a trading account has been multiplied by 1.1471 this month. This is what we call the growth ratio for the period.
  2. There was 20.51% growth in February, so the growth ratio in February is equal to 1.2051.

The growth ratio for the period is calculated according to the formula: (Growth in percentage terms) / 100%  + 1.0.   The growth ratio in January = (14.71%/100%)+1.0 = 1.1471.

You have to multiply together growth ratios of January and February of 2014 and get the general growth ratio for these months to calculate the growth for the period.

Total growth ratio = 1.1471 * 1.2051 = 1.3823

The total growth ratio helps us get the ratio in percentage terms as (Total growth ratio - 1) * 100% = Growth for the period

Growth for January-February of 2013 in percentage terms  = (1.3823 - 1.0) * 100% = 38.23%

As you can see, there was 38.23% growth in these two months. And it differs greatly from simple addition of percents for every month ( 38.23% != 14.71% + 20.15%)

So if you want to get a year growth ratio, you need to multiply together growth ratios for each month, then subtract 1.0 from the product and multiply the result by 100%. This will be the compound year-to-date rate (YTD).

You need to do the same with annual growth values to see the growth for all years of trading.

Alain Verleyen
36042
Alain Verleyen  
Fernando Carreiro:

Actually, I think you may have copied the wrong section because the more appropriate answer, as per the OP's query "How is Signal Growth YTD calculated?", comes from point 24 of that very link (and I quote):

Yes thanks correcting it.
Fernando Carreiro
4360
Fernando Carreiro  
Alain Verleyen: Yes thanks correcting it.
My pleasure!
Marcos Bispo De Oliveira
227
Marcos Bispo De Oliveira  

I have a signal whose growth in the first month was -100%. In this case, could -100% in the first month affect all the rest of the calculations?

By the way, this is the signal: [link was deleted by moderator]

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