Hi team,
Can you tell how is the cumulative P&L calculated?
Hello @arjun08
We will certainly help you to provide an understanding of how Cumulative Returns for backtest are calculated on Streak. Let us understand this with an example. Please refer to the example strategy here: Streak | World's first algo trading platform without coding
The formula for %return calculations is:
%Returns = Profit or Loss / Initial Trade Capital * 100
Please note Initial Trade Capital is the Capital used for your very first transaction in the backtest period. Let us consider the example of ITC:
Profit (9.35)/ Initial Trade Capital (284.25) * 100 which will be 3.29% as shown in the above-shared strategy.
Cumulative %Returns = Sum of Final Profit or Loss for all scrips / Sum of Initial Trade Capital for all scrips * 100
Here the example Strategy has provided positive returns so we divide the Total Profit by the Total Initial Trade Capital used.
| Scrip | Profit/Loss | Initial Trade Capital |
|---|---|---|
| COALINDIA | 12.1 | 285 |
| IOC | 5.35 | 112 |
| ITC | 9.35 | 284.25 |
| Total | 26.8 | 681.25 |
As explained in the above table dividing Total Profit(26.8) by Total Initial Trade Capital (681.25), the strategy gives us +3.93%, the same as shown in the example strategy.
Hope this clarifies, if you have any more queries you can ask here and I’ll be happy to help. Alternatively, you can also reach out to us at [email protected]
2 Likes
Thanks for the detailed explanation