Exchange Open Position ROE VS Cornix Trade ROE

Why should I usually expect a difference between my open position ROE on the exchange to my Cornix Trade ROE?

A position’s and a trade’s ROE are two different things conceptually, and it makes sense they are different. Let’s understand why 🙂

A Cornix Trade is a group of orders which are measured as a whole, so a trade’s ROE calculation takes into consideration also previous orders which are part of the trade, TP, SL, or both.

The exchange usually calculates an open position ROE based on the position’s current state in comparison to the current market price, without taking into consideration other previous orders which were already executed.

For example, when the market price increases, an exchange open position ROE will compare the entry price only to the current market price. Cornix trade will also take into consideration previous take-profits (with lower prices than the current market price). This may cause a regular, profitable, long trade for example to have a lower ROE than an exchange open position.

Example:

The following is a Cornix open trade, in which two entry targets and one take-profit target were filled.

The current market price for this example is 75:

⚡️⚡️ #EXAMPLE\COIN ⚡️⚡️

Exchange: ExAmple

Signal Type: Regular (Long)

Entry Targets:

1) 50 - 50% ✅

2) 45 - 50% ✅

Take-Profit Targets:

1) 70 - 50% ✅

2) 80 - 50%

Stop-Loss Targets:

1) 30

Exchange Open Position ROE:

The current position on the exchange is 50% of the original position as we sold 50% on take-profit 1 at a price of 70.

As the exchange usually calculates the entry price based on the FIFO method (first in first out), the first 50% coins bought at a price of 50 (entry target 1) were the ones to be sold out at a price of 70 when hitting take-profit 1, therefore these were already sold and won’t be taken into consideration in the open position calculation anymore.

From the exchange perspective, we have left with the other 50%, which were bought at an entry price of 45 (entry target 2).

The current price is 75, therefore the current ROE on this open position is (75-45)/45= 66.667%

Cornix Open Trade ROE:

From Cornix perspective we take into consideration the previous take-profit as it’s part of the whole trade, therefore Cornix trade’s ROE calculation will be as follows:

(70-50)/50*50% + (75-45)/45*50% = 53.333%