What Is Gain and How Is It Calculated in Headway Copytrade?
When you open the Investor Board in Headway Copytrade, you see a carousel of strategies. They all are unique, and the key difference is their Gain values. In this article, we explore the term Gain in detail and explain why it is important for investors as well as traders.
Gain: Definition
Gain is the ratio of gross profit to investments. In simpler terms, it reflects how much a trader has increased their trading capital.
On the Investor Board, Gain values can range from negative to positive. The lowest Gain can’t be below -100% and the maximum Gain value is unlimited. A strategy showing a Gain of -10% indicates that the strategy owner has incurred a loss equivalent to 10% of their initial balance. Conversely, a strategy with a Gain of 30% means the owner has achieved a profit equal to 30% of their initial balance.
Here are some real-life examples of Gain from the Personal Area:
How is Gain calculated?
On Headway Copytrade, Gain is calculated with the standard formula:
Gain = (Balance + Profit Last) / Balance
Please note: Gain is calculated for every closed position separately. Gain values don’t sum up – each of the values is a separate dot in the chart.
When calculating the Gain, Headway takes into account deposits and withdrawals, so the displayed values are always relevant and up-to-date. To protect the social trading system from fraudsters’ manipulations, the formula updates with every balance operation a trader makes.
To even out the effect that a new deposit or withdrawal would have on the Gain level, we make the following calculations: At every balance change, we multiply the standard formula by every previous Gain value before the change.
Gain = (Balance + Profit Last) / Balance * k
Where k is all the last Gain values before the balance change. In each situation, the formula would look like this:
No balance change (i.e., no deposit/withdrawal): Gain 1 = (Balance + Profit Last) / Balance
One balance change (i.e., a deposit/withdrawal): Gain 2 = (Balance 2 + profit last) / balance * Gain 1
Two or more balance changes (i.e., two or more deposits/withdrawals): Gain 3 = (Balance 3 + profit last) / balance * Gain 1 * Gain 2 * …
Study the examples below to gain a better understanding of the calculations.
Gain calculation. Case 1
Let’s calculate Gain for a strategy with a balance of $100 and no additional balance operations. A trader has made a successful trade and earned a profit of $10. Here is how their Gain value would change:
| Balance | $100 |
| Profit | $10 |
| Gain = (Balance + Profit Last) / Balance | (100 + 10) / 100 = 1.1 |
After that, the trader made another profit, now of $5. Here is the new calculation for this strategy’s Gain:
| Balance | $110 (only the last balance is taken into calculation!) |
| Profit | $5 |
| Gain = (Balance + Profit Last) / Balance | (110 + 5) / 110 = 1.04 |
Gain calculation. Case 2
Let’s calculate Gains for the same strategy after a withdrawal and another profitable trade.
As mentioned above, when a deposit or withdrawal happens, the next Gain is calculated by multiplying it by the previous Gain ratios.
| Balance 1 | $115 |
| Withdrawal | -$50 |
| Balance 2 | $65 |
After the withdrawal, the trader closed another position with a profit of $15.
| Balance 2 | $65 |
| Profit 2 | $15 |
| Gain 2 = (Balance 2 + Profit 2) / Balance 2 * k | (65 + 15) / 65 * 1.1 * 1.04 = 1.4 |
Gain: Conclusion
Gain is a ratio of gross profit to investments and a tool used to sort strategies based on their profitability. It is fine-tuned to any possible changes in the account balance making it a reliable tool to identify the best strategy for investment.
Headway traders and investors can use the chart data to analyze already-calculated Gain details. But if you are still willing to calculate Gain yourself, the key thing to remember is the following. The standard formula must be always multiplied by previous Gain values if any balance change occurs.
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