01
Percentage change
((Final value − Initial value) / Initial value) × 100
VariablesInitial value (V₀), Final value (V₁)
ExplanationMeasures how much a value has changed, as a percentage, between two points in time.
Worked exampleV₀ = 50, V₁ = 56 → ((56 − 50) / 50) × 100 = 12%
Common mistakeDividing by the final value instead of the initial value.
02
Simple return
(Final value − Initial value) / Initial value
VariablesInitial value, Final value
ExplanationMeasures a result relative to the starting point, expressed as a proportion.
Worked exampleInitial value 200, final value 230 → (230 − 200) / 200 = 0.15 (15%)
Common mistakeConfusing simple return with compounded variation over several periods.
03
Risk-reward ratio
Potential loss / Potential gain
VariablesPotential loss (distance to invalidation), Potential gain (distance to target)
ExplanationCompares what you risk losing to what you hope to gain before a decision.
Worked exampleRisk of 10, target of 30 → 10 / 30 ≈ 0.33 (a ratio of 1 to 3)
Common mistakeSwapping loss and gain in the calculation, producing a misleading ratio.
04
Simple average
Sum of observations / Number of observations
VariablesList of observed values (x₁, x₂, …, xₙ)
ExplanationSummarizes several observations with a single representative value.
Worked exampleValues 10, 12, 14, 16 → (10+12+14+16) / 4 = 13
Common mistakeUsing the average alone without accounting for the spread of the values.
05
Range
High − Low
VariablesObserved high, Observed low
ExplanationMeasures the gap between the highest and lowest point over a period.
Worked exampleHigh 120, low 105 → 120 − 105 = 15
Common mistakeComparing ranges across periods of different lengths without adjusting for it.
06
Relative position
(Current price − Low) / (High − Low)
VariablesCurrent price, High of the zone, Low of the zone
ExplanationPlaces a price within an observed zone, between 0 (at the low) and 1 (at the high).
Worked exampleZone 100–120, current price 114 → (114 − 100) / (120 − 100) = 0.7 (70% of the zone)
Common mistakeInterpreting a high relative position as an automatic reversal signal.