Thought I’d share this.
If you invest £100 for 360 days and make £10 profit then in almost a year you have made 10%. Easy
But say 5 days before year end you invest an extra £1,000.
You then find after 365 days you have made £20 profit. But is that good? 20/1,100 is 1.8% but that’s just obviously not right since you only held the £1,000 for 5 days, but the £100 for 365.
You want to find effectively what that £1,000 is worth. So if you divide it by 365 and held it for 5 days its like holding £13 for a year.
So in reality your profit of £20/100+13 = 17.7% weighted average.
This is where I’m sharing my way of monitoring profit.
It works for withdrawals and of course for profits over 1 year. You simply record each capital transaction (money in or out of freetrade) and at any time just dump your current profit in to find out how well you are doing.