Trading metrics
ROI versus dollar PnL: comparing wallets fairly
Dollar PnL measures the money gained or lost on a stated basis. ROI expresses a result relative to a defined capital base. A larger account can earn more dollars with a lower percentage return, while a small denominator can make an unstable record look impressive.
Start with the denominator
A percentage is incomplete until you know what capital it divides by. Initial account equity, average capital, allocated strategy capital and position margin can all produce different percentages from the same dollar result. Read the tracker’s definition rather than treating every ROI label as interchangeable.
Hypothetical example: $1,000 profit on $10,000 of starting capital is ten percent in a simple no-flow calculation. The same $1,000 on $100,000 is one percent. The dollar gain matches while the scale of the capital commitment differs.
Capital changes complicate return comparisons
A deposit midway through a period changes the capital available to trade. Dividing the final profit by the original balance can exaggerate performance if new money funded much of the exposure. A withdrawal can create another misleading denominator. Cash-flow-aware methods answer different questions from an unadjusted equity change.
Time-weighted methods aim to separate the strategy’s path from external capital movement. Money-weighted methods reflect the timing of invested capital. This guide does not assume WalletFollow exposes every possible method; use the basis actually stated beside the metric.
Small bases need stronger scrutiny
A wallet with very little starting equity can show a large percentage after a small absolute gain. Leverage, a deposit or a near-zero denominator can make the interpretation fragile. A guarded or unavailable ROI can be more honest than a spectacular percentage produced on an unusable base.
Compare the size of the sample, capital and loss alongside the return. A high ROI on a tiny account does not demonstrate that the strategy can scale to larger orders with the same liquidity or execution quality.
Build a consistent comparison
Choose the same period, account scope, return method and cost treatment for every wallet. Add dollar PnL, capital, drawdown and exposure so the percentage remains interpretable. In WalletFollow, preserve unavailable values and their reasons instead of sorting them as zero. A leaderboard is only comparable to the extent that its inputs and eligibility rules match.
- Name the capital denominator.
- Adjust or explain deposits and withdrawals.
- Review drawdown and effective exposure.
- Treat high percentages on small samples cautiously.