How to compute trading returns?

Hi guys,

I'm a student in finance and I am currently working on a technical analysis project.

I used historical data and designed a strategy to take positions and to see if I can beat a Buy & Hold strategy.

My question is pretty simple, I have computed the returns for each of my trading, and I would like to know the overall return of my strategy. I just took all the return, add +1 to each (to get a number such as 1.04 when I made a 4% return, or 0.93 when I got a return of -7%) and I used this formula in excel to compute the overall return:

=product(O4:O128)-1

One of my classmate tells me I should have used the geomean function, but that doesn't seem logical to me, as I am not trying to find an average return, but the overall return of all the positions I took.

Thank you for your input, and do not hesitate to tell me if I'm on the wrong sub, but I figured out that y'all were probably the best to answer my question as it relates to the stock market.

Submitted December 11, 2016 at 08:52AM by usernamesareshorther http://ift.tt/2hitarZ