OK..Here is a question that nobody has been able to answer. When you read the papers and see an ad that says "20% return last year"..or something like that, it's rather easy to calculate: You start with $100, make $25 at end of 12 months, your ROE or perforamce is 25%. But for many daytraders who do not have any trading capital in their firm there is no "starting capital" to calculate that ROE. So .. how do we calculate our perforamce when someone asks you "What was your performance last year"? I mean, what is our "starting capital"? How can we calculate our ROE?
The answer is simple: DON'T If you are making enough cachingos to have a nice life, that's all that counts...
Here's a better one. If you do have capital in your account, how do you calculate for taxes. Do you use your starting capital on jan 1, or do you use the figure you'd get by taking jan 1 - any extra taxes (rebates) you get (receive) from april 15 calculations. I currently am using the figure I had on jan 1 - the additional money I had to pay for taxes since I made significantly more than my estimated earnings. I use that figure only for total account return. Since most of my account is not short term. For my short term, I just use the % return I've made assuming I started with 60k, since I sweep down to that every time I have gains. So it's total gains / 60k and that gives me total return for trading. Is this how other people do their calculations in regard to taxes. I want to know b/c I want to use my total returns someday to get more money to manage.