I am getting confused when calculating the percentage profit (or loss) of a short position and I don't know which version is the right one:
version 1:
// I enter a short position with entry price 8 and exit it with 10
// absolute loss = -2 (what is the value in percentage?)
enterShort=8, exit=10 => (8/10 - 1) = -0.2 = -20% loss
version 2:
// I enter a short position with entry price 8 and exit it with 10
// absolute loss = -2 (what is the value in percentage?)
enterShort=8, exit=10 => (10/8 - 1) = 0.25 = 25% loss
I guess, version 1 is correct and version 2 is wrong. Am I right?
If version 1 is correct, then the percentage calculation for short positions would be the same as for typical long positions. Am I right?