Return on Investment (ROI)

Return on Investment - A basic efficiency ratio: (Net Profit ÷ Initial Investment) × 100%. It measures the percentage gain (or loss) relative to starting capital. For example, an ROI of 50% means the strategy gained 50% of the initial deposit. It’s essentially the same as (Ending Balance / Starting Balance – 1). A high ROI is good, but must be considered alongside risk and time frame. Babypips defines ROI as “return (net profit) divided by total cost”.