# How is profit calculated?

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• How is profit calculated?

Two methods are used for calculation: cumulative and absolute.

Cumulative (time-weighted) profit, determines the effectiveness of the investments made in the account since its creation.

This approach relies on the formula to calculate profit:

( (Realized PNL* / Balance* + 1) x (Realized PNL / Balance + 1) x … x (Realized PNL / Balance + 1) — 1 ) x 100

*Balance at the moment of transaction opening
*Realized PNL of the current deal

A distinctive feature of this method of calculation is that cash inflows, cash outflows and investment amounts over the period of the transaction do not affect the profit.

We calculate the profit of EVERY trade based on the balance state before the opening of this trade and the result is not affected by the deposits/withdrawals made before the closing of this trade.
The next transaction will already be based on a new balance state.

Absolute profit is calculated based on all deposits at the moment.

Formula:

Day profit = ( Profit_day / Deposits ) x 100

Full period profitability = (Profit_general / Deposits) x 100

Total profit is the result of simply summing up all the daily profits