Annual Return in terms of trading terminology is the return on trading funds that a trader or Trading portfolio returns over a specific trading period, expressed as an Annual Percentage. The rate of Annual Return is expressed as a percentage of the total value of the fund or portfolio (the Initial Investment) and shows a Geometric Mean rather than an Arithmetic Mean.

A Geometric Mean is calculated from percentages derived at from values whereas an Arithmetic Mean uses the actual values themselves to calculate the final result. The Geometric Mean must be used for calculating Annual Return as it takes into account the affect of compounding where the initial investment will increase (or possibly decrease) year on year.

Annual Return is the standard or preferred method of calculating a return on investment for investments with liquidity and as it is calculated using the Geometric Method will always take into account any increases in the portfolio value to produce a more accurate figure than just a simple return.

The formula for calculating annual return can be expressed as below:

Annual return=((final value/initial value )1/years )−1

Where years = number of holding years for the investment in the trading fund

Annual return is extremely important to investors as it determines the average yearly return of an investment over the entire lifetime of the investment and also takes into account any losses that may occur over this period. It is also one of the easiest forms of return on investment calculations and is easily understandable. In its simplest form the annual return is the geometric average of the investment over A specific time period.

Key takeaways:

A Geometric Mean is calculated from percentages derived at from values whereas an Arithmetic Mean uses the actual values themselves to calculate the final result. The Geometric Mean must be used for calculating Annual Return as it takes into account the affect of compounding where the initial investment will increase (or possibly decrease) year on year.

Annual Return is the standard or preferred method of calculating a return on investment for investments with liquidity and as it is calculated using the Geometric Method will always take into account any increases in the portfolio value to produce a more accurate figure than just a simple return.

The formula for calculating annual return can be expressed as below:

Annual return=((final value/initial value )1/years )−1

Where years = number of holding years for the investment in the trading fund

Annual return is extremely important to investors as it determines the average yearly return of an investment over the entire lifetime of the investment and also takes into account any losses that may occur over this period. It is also one of the easiest forms of return on investment calculations and is easily understandable. In its simplest form the annual return is the geometric average of the investment over A specific time period.

Key takeaways:

Annual return is a measurement of how an investment has performed (positively or negatively)

on average each year over a specific time period.

on average each year over a specific time period.

Annual return is calculated as a geometric average rather than an arithmetic average to take

into account compounding.

into account compounding.

Annual return is one of the simplest methods of return assessment and is used worldwide by

investors and fund managers.

investors and fund managers.

No item found!

Supercharge Your

Trading With CFI

Ultra-fast execution

Ultra-competitive conditions

Powerful tools & analytics

Annual Return in terms of trading terminology is the return on trading funds that a trader or Trading portfolio returns over a specific trading period, expressed as an Annual Percentage. The rate of Annual Return is expressed as a percentage of the total value of the fund or portfolio (the Initial Investment) and shows a Geometric Mean rather than an Arithmetic Mean.

A Geometric Mean is calculated from percentages derived at from values whereas an Arithmetic Mean uses the actual values themselves to calculate the final result. The Geometric Mean must be used for calculating Annual Return as it takes into account the affect of compounding where the initial investment will increase (or possibly decrease) year on year.

Annual Return is the standard or preferred method of calculating a return on investment for investments with liquidity and as it is calculated using the Geometric Method will always take into account any increases in the portfolio value to produce a more accurate figure than just a simple return.

The formula for calculating annual return can be expressed as below:

• Annual return=((final value/initial value )1/years )−1

Where years = number of holding years for the investment in the trading fund

Annual return is extremely important to investors as it determines the average yearly return of an investment over the entire lifetime of the investment and also takes into account any losses that may occur over this period. It is also one of the easiest forms of return on investment calculations and is easily understandable. In its simplest form the annual return is the geometric average of the investment over A specific time period.

A Geometric Mean is calculated from percentages derived at from values whereas an Arithmetic Mean uses the actual values themselves to calculate the final result. The Geometric Mean must be used for calculating Annual Return as it takes into account the affect of compounding where the initial investment will increase (or possibly decrease) year on year.

Annual Return is the standard or preferred method of calculating a return on investment for investments with liquidity and as it is calculated using the Geometric Method will always take into account any increases in the portfolio value to produce a more accurate figure than just a simple return.

The formula for calculating annual return can be expressed as below:

• Annual return=((final value/initial value )1/years )−1

Where years = number of holding years for the investment in the trading fund

Annual return is extremely important to investors as it determines the average yearly return of an investment over the entire lifetime of the investment and also takes into account any losses that may occur over this period. It is also one of the easiest forms of return on investment calculations and is easily understandable. In its simplest form the annual return is the geometric average of the investment over A specific time period.

Annual return is a measurement of how an investment has performed (positively or negatively)

on average each year over a specific time period.

on average each year over a specific time period.

Annual return is calculated as a geometric average rather than an arithmetic average to take

into account compounding.

into account compounding.

Annual return is one of the simplest methods of return assessment and is used worldwide by

investors and fund managers.

investors and fund managers.

El Day Trading se refiere a cuando los operadores compran y venden [instrumentos] financieros dur...

The first thing to be clear on when deciding when to enter a trade is your trading plan. only enter ...

A stock market index, also known as a stock index, is a way of measuring the performance of the stoc...

A price-weighted index is a stock index where the companies in the index form a fraction of the tota...

Market capitalization, also known as market cap, is the total value of a publicly traded company's s...

The margin deposit is also known as the initial margin, deposit margin or simply the deposit. if you...

At cfi you trade with what is called a margin account. margin is the term used when we refer to the ...

Exchange-traded funds or etfs are investment funds that trade onvarious stock exchanges. etfs trade ...

Execution in financial trading terms refers to the finalisation of an order by a trader to either bu...

Equities, in the simplest terms, can be described as shares in the ownership of a company.
Equit...

Entry point refers to the price at which a trader [sold] or [bought] a financial [instrument] and th...

Drawdown is used by traders to measure any decline in investments over a specific time period and is...

A yield is a return generated from an investment over a particular period, usually in the form of in...

A downtrend refers to when the[price action] of a [financial instrument] moves to a lower price poin...

Annual Return In Terms Of Trading Terminology Is The Return On Trading Funds That A Trader Or Tradin...

The ask price (also known as the offer), is the lowest price that a seller is willing to offer (sell...

Trailing stop orders are a special type of stop-loss order that trails with price fluctuations that ...

Assets are defined as resources with an economic value that a country, company or individual possess...

In the foreign exchange markets, currency prices are displayed or quoted as currency pairs such as G...

Bearish is a term used to describe how a trader feels about the direction of a certain financial mar...

The bid price is the highest price that a buyer (the bidder) is willing to pay for goods or services...

Bonds are fixed-income instruments, and in basic terms, represent a loan made by an investor to a bo...

A breakout is when the price of a financial instrument or asset trades below a level of support or ...

Buying a financial instrument is the act of taking a [long position] on the instrument, speculating ...

A capitalization-weighted index can also be referred to as a market-value-weighted index. This is a...

This is a currency trading strategy that benefits from the differentials between a currency offerin...

Commodity currency refers to the types of currencies that move in parallel with the price of global ...

Contracts for difference, otherwise known as CFDs, commonly refer to an agreement between two parti...

The counter currency, otherwise known as the quote currency, is the second currency listed within a ...

Currency correlation refers to the relationship between two different currency pairs. A positive c...

A decentralized market utilizes a digital platform to allow traders to trade directly between themse...

A day order is when a trader informs their broker to buy or sell a financial [instrument] at a prede...

Direct market access or DMA is used when traders place trades directly in the electronic order book...

The exit point is the time that a trader decides to close their position. Knowing when to take or ba...

A currency pair is referred to as “exotic” when it consists of one major currency and one currency f...

In trading terminology, the term ‘filled’ refers to when an order placed by a trader has been retur...

Financial markets, broadly speaking, are any place where governments and organizations can go to obt...

The term Forex is short for foreign exchange and refers to the buying and selling of currency on the...

Fundamental analysis is a market analysis technique for determining the [intrinsic value] of a [fin...

Futures are financial contracts that obligate the buyer and seller of the contract to complete a tra...

A good till canceled order, commonly referred to as a GTC order, is an open order used by traders to...

Hedging is a risk management strategy that mitigates the risk of loss due to price fluctuations by o...

High-frequency trading, often referred to as hft, refers to algorithmic trading undertaken by system...

Illiquidity describes when a trader is unable to trade an [instrument] in the market in a straightfo...

The term “indices” is the plural of the word “index”, and in trading terms, an index is a way of tra...

Inflation is generally quoted in percentages and is the measure of the average price at which a sele...

Interest rates are the rate at which a lender is prepared to charge for the use of financial service...

The worth of a [financial instrument] or asset is referred to as intrinsic value. Intrinsic value is...

The market depth provides an indication of the liquidity for a trading product. It is presented in t...

A market maker, sometimes abbreviated to mm, is a company or person who quotes two-sided markets for...

A minor currency pair is a pair of currencies from large, strong economies that do not include the U...

A moving average is a technical analysis indicator that blends specific price points of a financial ...

An order or trade order is a client’s instruction to their brokerage firm to buy or sell a financial...

OTC trading, also known as over-the-counter trading or off exchange trading, describes a transaction...

The term ‘paper trading’ originated from when traders on the stock market wanted to practice trading...

The term pip stands for point in percentage and is the measurement of the smallest price move that a...

Position traders, sometimes also known as “buy and hold” traders, employ the longest-term trading st...

Price action is a form of technical analysis used to identify buy or sell opportunities when trading...

CFI provides traders access to over 7000 Stocks, Foreign Exchange pairs (Forex), Commodities, Indice...

The purchasing manager's index (PMI), is an indicator of the economic health from across 19 industri...

When trading foreign currency exchange, you will always see currencies represented in pairs. The fir...

The term “range trading” refers to areas in the financial markets when a market moves steadily betwe...

The term ranging trend refers to the price action of a financial asset trading around the same highs...

The terms support and resistance levels are by far the two most commonly used terms in technical ana...

Scalpers are the kind of traders that hold their trades for a few seconds to a few minutes at most.
...

Trading signals are trading ideas or suggestions for financial instruments that are used to identify...

Slippage is the difference between the price at which you expect your order to be filled and the act...

The spread is one of the most common and most important terms used when discussing trading terminolo...

A swap, also known as a rollover charge, is the interest you pay or earn for a trade that you keep o...

Take-profit (t/p) and stop-loss (s/l) orders are widely used as trading risk management techniques. ...

The two most common forms of analysis used by traders are fundamental analysis and technical analysi...

Whether you trade forex, commodities, or equities with CFI, there are hundreds of opportunities to p...

Trading capital refers to the funds a trader has available for them to buy and sell various assets o...

A trading platform is software that allows traders and investors to execute trades in the financial ...

Trends are an important aspect of trading and technical analysis. At any point in time, the market ...

Virtual trading is another term for demo account trading. A demo account is a virtual account used m...

If the price of the asset is unstable and changes frequently, with big spikes from time to time, the...

CFI Financial Group is an award winning global financial markets provider with over 23 years of experience and regulated entities in several jurisdictions, focused on offering impeccable execution and trading conditions including very low spreads, professional services, dedicated support and powerful tools.

Credit Financier Invest Limited has regulated subsidiaries in

**London • Larnaca • Beirut • Amman • Dubai • Port Louis**

Important Disclaimer:

We would like to remind that while we endeavour to provide best possible services, Credit Financier Invest Limited provides execution only services and any information, reports, opinions, commentary or other materials he receives from CFI directly or from its employees or through any analytical tools provided to him or third party research provided to him from the Company shall not be deemed as investment advice and it cannot be relied upon to make investment decisions. The Client commits to make his own research and from external sources as well to make any investment. The Client accepts that CFI will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information. The contents of any report provided should not be construed as an express or implied promise, as a guarantee or implication that clients will profit from the strategies herein, or as a guarantee that losses in connection therewith can, or will be limited.

Forex and CFDs are leveraged products that incur a high level of risk and a small adverse market movement may expose the client to lose the entire invested capital. **The vast majority of retail client accounts lose money when trading in CFDs.** You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. The possibility exists that you could sustain a loss in excess of your deposited funds even if a stop loss is used and therefore, you should not speculate with capital that you cannot afford to lose and be aware of trading risks. Credit Financier Invest Limited provides general information that does not take into account your objectives, financial situation or needs. The content of this website must not be interpreted as personal advice. Please ensure that you understand the risks involved and seek independent advice if necessary.