Strategy results in the marketplace come from the actual returns of the running bot held by the strategy provider. That means those results reflect the real performance of the strategy provider who is actively trading with it.
The returns are calculated as the Gross Profits & Loss over a period of time divided by the Required Assets.
Gross Profits & Loss: the sum of the closed positions' profit & losses over a period of time.
Required Assets: the average amount of assets needed to run the strategy. Specifically, it is the average maximum amount of positions (in $) open at the same time, over a period of time.
Period of Time: the period of time can be a calendar month, the last 30 days, and other periods such as the last 7 weeks, the last 3 months, and the last 6 months.
Example:
Trader A has a bot that opened and closed 3 positions in the last 30 days.
Position I: open on day 0, closed on day 30. PnL of 50 USDT, position size of 500 USDT.
Position II: open on day 0, closed on day 15. PnL of 50 USDT, position size of 500 USDT.
Position II. open on day 0, closed on day 5. PnL of 10 USDT, position size of 500 USDT.
The total Gross PnL over the last 30 days is 50+50+10=110 USDT
The Required Assets to run the bot, over the last 30 days, are calculated as follows:
- From day 0 to day 5, all 3 positions are open at the same time. Required Capital: 500+500+500 = 1,500 USDT
- From day 5 to day 15, 2 positions are open at the same time. Required Capital: 500+500 = 1,000 USDT
- From day 15 to day 30, 1 position is open. Required Capital: 500 USDT
The Average Required Asset over the last 30 days is calculated as follows: (1,500*5+1000*10+500*15)/30 = (7,500+10,000+7,500)/30 = 833.3 USDT
The Return On Investment is = 110/833.3 = 13.2%