What is ROI (Return on Investment)?
Return on investment is the percentage profit or loss relative to the money put at risk or invested. In trading, clarify whether cost means margin deployed or full notional.
Formula
ROI = (Gain − Cost) ÷ Cost × 100
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how ROI (Return on Investment) shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
Apply ROI to your Nifty 50 sleeve (spot near 24,300): track the metric on closed index F&O or ETF trades over at least 30 sessions before changing rules. NSE costs and slippage on fast opens often widen the gap between spreadsheet roi and bank P&L.
Reliance Industries perspective
On Reliance (₹1,300) delivery or intraday trades, calculate roi with contract-note costs included. Single-name results can look strong on roi while your Nifty-correlated book tells the opposite — tag “RELIANCE” separately in TradeLyser.
Bank Nifty futures perspective
Bank Nifty futures near 55,000 (lot 30) amplify roi swings versus cash — one volatile session can move the metric more than a week of Nifty trades. Log margin mode (MIS/NRML) with each entry for honest review.
| ROI basis | Typical use | Caution |
|---|---|---|
| Margin deployed | F&O campaigns | Ignores tail risk |
| Full notional | Cash equity | Hides leverage effect |
| Net after costs | Tax review | Brokerage + STT required |
How to validate
- Minimum sample: 30 closed trades on one strategy tag before trusting ROI (Return on Investment).
- Check for one outlier week inflating ROI (Return on Investment) — export largest winners and losers.
- Recompute ROI (Return on Investment) after including brokerage, STT, and slippage on F&O tags.
- Compare ROI (Return on Investment) on the same date range as profit factor and max drawdown.
How to track in TradeLyser
- Open Strategy Board or analytics → filter by strategy tag and review period.
- Locate the widget or column reporting ROI (Return on Investment) (or export trades to compute manually).
- Store snapshot values in weekly review: ROI (Return on Investment), profit factor, drawdown, trade count.
- If ROI (Return on Investment) is custom, add a spreadsheet column fed from TradeLyser CSV export.
Best practices
- Publish ROI (Return on Investment) per strategy, not only at account level.
- Use the same calculation window (weekly vs monthly) year-round.
- Pair ROI (Return on Investment) with sample size in every review slide or note.
- Reconcile ROI (Return on Investment) with broker statements before tax filing.
Common pitfalls
- Changing rules after fewer than 20 trades because ROI (Return on Investment) moved slightly.
- Mixing intraday and positional tags when computing ROI (Return on Investment).
- Ignoring costs so ROI (Return on Investment) looks better than banked P&L.
- Letting one outlier trade dominate the ROI (Return on Investment) reading.
How to use this in TradeLyser
Tag ROI basis in strategy notes (margin vs notional). Monthly review: ROI per tag with trade count and max loss on the same window.
Reference guide
| Context | Value | Reading |
|---|---|---|
| Negative | Losing money | Below breakeven |
| 0-5% | Low return | Below savings account |
| 5-10% | Modest return | Near market average |
| 10-20% | Good return | Beating the market |
| 20-30% | Very good | Outperforming most traders |
| 30-50% | Excellent | Top-tier performance |
| 50%+ | Exceptional | Verify sustainability |
Related terms
Absolute return is the percentage change in your trading account over a chosen period, ignoring whether Nifty or Bank Nifty did better or worse. It answers a simple question: did your capital grow?
Compound annual growth rate expresses how fast capital compounded if growth were steady each year. It is the standard way to compare multi-year performance without overweighting the final year.
Profit and loss (P&L) is the change in value from trading activity. Realised P&L locks at exit; unrealised P&L marks open positions to market.
Profit factor summarises whether total winning rupees outweigh total losing rupees over a window. Below 1.0 means net losing; above 1.0 means net winning before you judge consistency.
FAQ
What is a good ROI for trading?
A good annual ROI for active traders is 15-30% after all costs. The stock market historically returns about 10% annually. Consistently achieving 20%+ ROI puts you ahead of most professional fund managers. Be cautious of ROI claims above 50% annually—they're often unsustainable or involve extreme risk.
How do you calculate ROI in trading?
ROI = (Final Value - Initial Investment) / Initial Investment × 100. For example, if you invested $10,000 and your account is now worth $13,500, your ROI is ($13,500 - $10,000) / $10,000 × 100 = 35%.
What is the difference between ROI and profit?
Profit is the absolute dollar amount gained ($3,500). ROI is the percentage return relative to your investment (35%). ROI is more useful for comparison because $3,500 profit on $10,000 (35% ROI) is better than $3,500 on $50,000 (7% ROI).
Should I calculate ROI per trade or overall?
Both are useful. Per-trade ROI shows individual trade efficiency. Overall ROI shows your total performance. For trading journals, also track ROI by strategy, timeframe, and instrument to identify what works best.
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