Trading metrics explained

Trading metrics explained

Kinfo works by integrating directly with a majority of the top brokers in the US. When linking your broker, kinfo will automatically download account data and calculate relevant trading metrics to help you measure your trading performance.

The trading metrics calculated are:

  • Average gain in dollar amount
  • Average gain in percent
  • Winning trades in percent
  • Profit

What is a trade?

Before we dive into performance metrics, we need to understand what a trade is. A trade consists of at least one buy and one sell transaction.

Let´s assume you bought 1 share of AAPL on Oct 01 at $100 and you sold it on Oct 04 at $120. These two transactions become a trade with $20 profit.

A trade can consist of multiple transactions. Let´s assume you bought 1 share of AAPL on Oct 01 at $100, you then bought 1 additional share of AAPL on Oct 02 at $110 and sold both shares on Oct 04 at $120. These three transactions will make up 1 trade with $15 profit.

In the second example, your profit is $15 since your average acquisition price for your two shares is $105 ($100 + $110) /2.

It´s good to have a basic understanding of how this works, but you don´t have to worry about calculating this since kinfo does it for you.

Below is an example of a profitable trade based on multiple transactions as shown on kinfo.

trade

Trading metric: Average gain in dollar amount

This metric will take multiple trades over a period of time and calculate an average gain of those trades. Let´s assume you make 5 trades over a month as illustrated below

Let´s assume you have closed out a few trades according to the table below

Exit dateSymbolGain
Oct 01AAPL$20
Oct 08NVDA$30
Oct 15MSFT-$20
Oct 22AMZ$10

Your total gain for the period is $40 based on 4 trades ($20 + $30 – $20 + $10). Your average gain per trade is $10, as calculated by taking your total gain and dividing it by the number of trades ($40 / 4).

Average gain in percent

Similar to average gain in dollar, this metric takes a number of trades and calculates the average, but this time it´s based on the gain in relation to the acquisition price of the position. To illustrate this, we can use the same table and add in the acquisition price to get the gain in percent for each trade.
Exit dateSymbolAcquisition priceGainGain in %
Oct 01AAPL$100$2020%
Oct 08NVDA$110$3020%
Oct 15MSFT$100-$20-20%
Oct 22AMZ$100$1010%
The average gain in percent for this period is 7.5% as calculated by adding the gain for each trade and dividing by the number of trades (20% + 20% – 20% + 10%) / 4.

Winning trades in percent

This metric is probably the easiest to understand since the calculation is so simple. Take the number of trades with a positive gain and divide it with the total number of trades
Exit dateSymbolGainWin?
Oct 01AAPL$20Win
Oct 08NVDA$30Win
Oct 15MSFT-$20Loss
Oct 22AMZ$10Win
The winning trades in percent is 75% in the example above as calculated by taking the winning trades number and divide it with the number of total trades (3/4).

Profit

Kinfo calculates profit and will also show you a chart of your accumulated profit over time. The total profit is easy to calculate by summarizing all the gains for the period. In order to create a chart we have to add another number called cumulative gain, which is the gain for the date + all previous dates.
DateSymbolGainCum gain
Oct 01AAPL$20$20
Oct 08NVDA$30$50
Oct 15MSFT-$20$30
Oct 22AMZ$10$40
In the example above the total profit would be $40 as calculated by summarizing all gains. A profit chart based on cumulative gain would look like this:
small profit chart 1