Traders use percentages to keep track of their profits and losses for one simple reason—it evens out the playing field. Saying you made $10,000 is not an entirely accurate way of describing how good of a trader you are. One trader might use $1 million for their trading capital while another might have only started out with $10,000. In this respect, the trader who doubled their trading money (100 percent profit) is clearly a more skilled trader than the trader who only made 1 percent profits using Forex Arb.
Another thing to take into account is the timeframe. A good trader can make 5 percent or more per year on a consistent basis. Making 5 percent out of a single trade then, can be the mark of a superior trader. Of course, one trade is not enough to measure the strength of a trader. Some trades will be profitable, others will not be so.
In short, the measure of a good trader is taken over the course of a longer period, in percentages. If you make a $100,000 profit, this means very little without these two descriptors. Making $100,000 over the course of a year is great, but you cannot truly appreciate how good the trader is at their job unless you put it in percentage. A 100 percent profit over the course of a year is a phenomenal feat. Having these descriptors puts things into a frame of reference and will be a more complete assessment of exactly how successful the trader is.
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