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Why can cumulative return remain negative after equity recovers?

Understand why deposits, withdrawals and later gains can change Strategy Equity or Strategy AUM without resetting cumulative return in Funds Management and Social Trading.

Your current equity and your cumulative return measure different things. A deposit or subscription can increase the money in a strategy, but it is not trading profit and does not erase an earlier trading loss.

This is why the Equity Curve can rise while Cumulative Returns remain below zero.


Where can I see these figures?

Open a Fund Strategy or Signal Provider profile in the Client Portal, then find the Performance section.

Depending on the page, you can switch between:

  • Cumulative Returns

  • Equity Curve

The Funds Management page displays the Equity Curve as Strategy AUM. The Social Trading page displays it as Strategy Equity.


What does cumulative return measure?

Cumulative return measures the strategy's trading performance across its full record. FXTRADING.com separates the record into periods whenever external money is added or removed, then links the performance of those periods together.

In practical terms:

  • Trading profit or loss changes performance.

  • A deposit, subscription, withdrawal or redemption changes the amount of money in the strategy.

  • Adding money is not treated as profit.

  • Removing money is not treated as a trading loss.

  • A new cash flow does not reset the earlier performance record.

This approach is designed to show the performance of the trading activity without allowing cash movements to make the return look artificially higher or lower.


A simple example

Assume a strategy starts with USD 500.

Before trading begins, its cumulative return is 0%.

The strategy then loses USD 400, leaving equity of USD 100. The strategy has lost 80% of its starting value, so only 20% of the original performance value remains.

An additional USD 400 is then added. Equity rises from USD 100 to USD 500, but the deposit is not trading profit. The cumulative performance record therefore does not return to zero.

If equity later rises from USD 500 to USD 1,000

The strategy gains 100% after the additional deposit. However, doubling the remaining 20% performance value only brings it to 40% of its original level.

The cumulative return is therefore still -60%.

If equity later rises from USD 500 to USD 2,500

The strategy gains 400% after the additional deposit. Increasing the remaining 20% performance value fivefold brings it back to 100% of its original level.

The cumulative return is therefore 0%.


Why does recovery require a larger percentage gain?

Percentage losses and gains are not symmetrical.

After an 80% loss, the strategy is working from the 20% that remains. A 100% gain only doubles that remaining amount; it does not restore the full value lost earlier. A much larger subsequent gain is required for the cumulative return to recover to zero.


Why might my personal result differ from the strategy's return?

Your personal result depends on when your subscription began, when you added or redeemed funds, the trades copied or allocated to your account, applicable fees and other account-specific factors.

The strategy's cumulative return describes the strategy's historical trading record. It is not a promise that every Investor experienced the same result.

Important: Past performance, a recovery in equity or a positive recent return does not guarantee future results. Review the return, drawdown, risk and trading information together before making an investment decision.

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