Three checkpoints in this guide
Follow the full walkthrough in order, or jump directly to one of its main sections.
Start with the dollar reconciliation
Deposits are positive external flows, so they are subtracted. Withdrawals are money earned or capital removed, not a trading loss, so they are added back. If funds moved between your own spot and futures wallets, the transfer should cancel at the combined-account level.
Worked account example
An account starts the month at $10,000. The trader deposits $2,000 on day 10, withdraws $500 on day 25, and ends with $12,350. The cash-flow-adjusted dollar result is:
$12,350 − $10,000 − $2,000 + $500 = $850 profit.
Calling the balance increase $2,350 of profit would overstate performance by the net $1,500 external contribution. The dollar result still needs a fee/funding check and consistent valuation of any open positions.
Use time-weighted return when cash moves mid-period
One percentage using starting capital fails when capital changes during the month. A time-weighted method values the account at each external cash flow, calculates each sub-period return, and links them:
This isolates the strategy/account performance from the timing and size of deposits and withdrawals. It requires reliable equity snapshots around each flow. If those snapshots do not exist, report the dollar result and a clearly labelled approximation rather than a precise-looking percentage.
Time-weighted and money-weighted return answer different questions
Time-weighted return is useful for asking how the account strategy performed independent of when capital was added or removed. Money-weighted return asks what the trader’s actual invested cash earned and therefore depends on cash-flow timing. Do not switch between them to obtain the more attractive percentage. Label the method, valuation times, reporting currency, and cash-flow convention beside every result.
Worked time-weighted example
An account grows from $10,000 to $10,500 before a $5,000 deposit, a first sub-period return of 5%. Immediately after the deposit its capital is $15,500. It then ends at $15,810, a second sub-period return of 2%. The linked return is (1.05 × 1.02) − 1 = 7.1%. Dividing the $810 balance increase by the original $10,000 would report 8.1% and incorrectly treat the added capital as if it had been present for the whole period.
When exact cash-flow valuations are missing
True time-weighted return needs a defensible portfolio value at each external cash flow. If that snapshot is missing, do not fabricate it from the end-of-day balance. Report reconciled dollar P&L first. A Modified Dietz approximation can be used only when every external flow amount and date is known; label it as an approximation and document the weighting convention. It is not interchangeable with true TWR, especially when the account is volatile around a large deposit or withdrawal.
Build the return ledger
| Row type | Performance treatment |
|---|---|
| Realized trade P&L | Include |
| Trading fees and commissions | Include once as costs |
| Funding paid/received | Include in net performance |
| Deposits and withdrawals | External cash flows; exclude from profit |
| Transfers between owned subaccounts | Cancel at consolidated level |
| Open-position value | Include consistently at beginning/end for total return; keep separate for closed-trade analysis |
| Rewards, staking, airdrops | Classify explicitly; do not hide them inside trading edge |
Multi-exchange return needs one boundary
Choose a reporting currency and a valuation timestamp. Convert each venue at a documented rate/time, then eliminate transfers between your own exchanges and wallets. If a withdrawal leaves Exchange A and arrives at Exchange B, it is not a loss followed by a gain. Keep transaction IDs or matching timestamps so the pair can be proved.
Value stablecoins and fee assets consistently
USDT, USDC, and other quote assets should not be silently hard-coded to one reporting-currency unit when the goal is an auditable return. Choose a policy—such as the venue’s period-end conversion or an external reference at the cutoff—and apply it at both beginning and end. Preserve fees paid in BNB or another token in native units before conversion. Otherwise a change in the token’s value can disappear inside “trading P&L.”
Worked consolidated-account bridge
Exchange A starts at $8,000 and Exchange B at $2,000. During the month, $1,500 moves from A to B, $1,000 is deposited from a bank, net trading P&L is $620, and open-position value rises $80. Consolidated ending equity should be $11,700: $10,000 beginning equity + $1,000 external deposit + $620 net trading + $80 open-value change. The $1,500 internal transfer contributes zero at the combined boundary.
If the two venue statements total $11,680, the return is not finished. Search for a withdrawal fee, transfer asset conversion, timing mismatch, or omitted self-custody balance before calculating a percentage.
Month-end control table
| Control | Must agree with |
|---|---|
| Beginning equity | Prior period’s reconciled ending equity |
| Net external flows | Deposits minus withdrawals across all owned venues |
| Net trading result | Realized P&L minus fees plus/minus funding and classified trading costs |
| Change in open-position value | Consistent mark/valuation at both period boundaries |
| Ending equity | Exchange statements plus self-custody assets inside the chosen boundary |
If ending equity does not bridge from those components, the return is not ready to compare. Common missing rows are an internal transfer recorded on only one side, fees paid in another asset, or an open position valued at a different timestamp.
Return errors that survive a clean dashboard
- A deposit counted as profit or a withdrawal counted as loss.
- Fees and funding excluded from a gross trade report.
- Open positions valued at different prices or times.
- Stablecoin balances assumed to equal the reporting currency without a valuation rule.
- Internal transfers counted twice across exchanges.
- Rewards mixed with strategy P&L.
The export → import → reconcile → review route
- Export: collect execution, fee/funding, deposit/withdrawal, transfer, and statement/equity evidence for the same period.
- Import: upload supported execution files through TSB Journal → Import trades. Keep non-trade ledgers as reconciliation evidence.
- Reconcile: prove beginning/ending equity, external flows, internal transfers, net trade P&L, and open-position valuation.
- Review: compare dollar P&L, time-weighted return, drawdown, setup performance, and process errors. Do not rank strategies by ending balance alone.
Period-close sign-off
- The beginning value equals the prior period’s signed-off ending value.
- Every external deposit and withdrawal has amount, asset, timestamp, and ownership classification.
- Transfers between owned accounts cancel at the chosen reporting boundary.
- Fees, funding, rewards, and borrow costs are classified once.
- Open positions use the same valuation policy at both boundaries.
- Dollar P&L agrees before TWR, money-weighted return, or any annualized figure is shown.
- The published result states reporting currency, cutoff time, included accounts, and return method.
Method reference
The cash-flow treatment follows the time-weighted return principle described by the CFA Institute’s GIPS calculation methodology. This guide adapts the method to a personal trading ledger; it is not an investment-performance presentation standard or tax advice.
