On EquitySim when we use the term "return" what we really mean is "rate of return." Rate of Return measures how much profit you have generated relative to your starting cash amount.
The Math behind Return
Return = [Value(end) - Value(start) ] ÷ Value(start)
Essentially it is the money that you generated/lost divided by the money you started with.
At the top of your portfolio page on EquitySim you will see both your daily returns (inside the orange box), and your all-time returns (in the purple box). For this example, we chose someone who started yesterday, so they are the same.
Value(start) = 1,000,000
Value(end) = 998,896
Return = [998,896 - 1,000,000] ÷ 1,000,000 = - 0.11%
So here I would say: "I generated a - 0.11% return (meaning I lost money) over the last 1 day."
Tips to Keep in Mind:
Tip #1: Don't beat yourself up if you cannot generate a positive return, return requires luck in the short-term.
Tip #2: Set a goal for the amount of profit you want to generate, make sure it is reasonable.
You will want to try and generate as much profit as you can, however, you will notice that the amount of money made in the Financial Markets is not always directly connected to how skillful you are.
Luck is a large component of generating returns, especially in the short-run.
This is why we have devised many challenges, and other metrics to help you measure how you are improving.
Here's a very basic table to help you set your expectations when creating your goals:
The common misconception is that a great investor can turn your $1,000 into $10,000 in a year. In the very rare occasions that this does occur, professionals are more likely to recognize this as someone who is very lucky, versus someone who is very skilled.