# How do you calculate “growth rate” in trading (not investing)?

I see people talking things like "market averages" regarding stockholder growth rates per annum.

I see things like "10% growth rate per annum is avverage in stockholders." I believe this pertains to investors, not traders. In trading, stocks may come and go within a matter of hours, leverage or not.

If I am a trader (like a day trader) trying to capitalize in short-term investments, how would I calculate return rate percentage per annum? Like, say I buy 1 share and sellout for 102% profit same-day -- and say I do 102-140% average over the years. If I trade frequently, how do I calculate yearly return rate?

• I want to address the fact that you appear to be expecting to make between 2%-40% profit every day, on average. Even at 2% profit per working day on a 1,000 initial investment equals 1000*(1+.02)^250 = \$141,265 at the end of the year. This is a 14,100% return over the year. Do it 2 years in a row, and you'd have \$19,956,184. You should temper your expectations with reality. If you think day trading is the way to turn 1k into 20M in 2 years [using the low end of your expected average return], then I feel you are not appropriately assessing the risk associated with your planned activity. – Grade 'Eh' Bacon Mar 2 '17 at 14:07
• @Grade'Eh'Bacon - I took it as he is providing example returns from individual trades (not returns per day), and from these individual trades how to calculate the annual return. Also, if a trader started with a \$1,000 account they would not be trading in the same way if the account grew to \$100,000 or \$1M or \$20M - more likely if they are profitable they would start taking money out (an income) on a regular basis. – Victor Mar 3 '17 at 5:39

You just divide your total profit over your starting capital and multiply it by 100%.

So, for example, if your starting capital is \$10,000 and you end the year with \$13,000 then you work out your yearly rate of return by:

Yearly profit = \$13,000 - \$10,000 = \$3,000

Yearly returns = \$3,000 / \$10,000 x 100% = 0.3 x 100% = 30%