What Is Cumulative profit?

Cumulative profit tells the overall profit of trading strategy over a time.

Cumulative profit is the excess of net income and gains over net losses, determined on a cumulative basis from the inception of an investment fund through to its termination date. It includes realized trading P&L, positions open P&L, and other total profits or losses generated since the trading strategy’s inception.

As trading strategies reinvest earlier profits, the cumulative profit compounds.

To calculate cumulative profit, one must add together all net profit numbers over a specific time frame.

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