What Is Profitability?

In quantitative finance, profitability tells how much a trading strategy has generated or is estimated to generate profits.

The profitability is expressed usually as yearly returns %. E.g. 20% profitability means that the trading strategy generates 1/5x return on investment capital yearly.

For multi-user trading strategies, profitability calculations get more complex as you need to take account the funding flow, deposits and redemptions.

TradingStrategy.ai offeres several methods of profitability calculation, for details see Profitability calculations documentation.

See also

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