Basics

Understand How Wiseinvest Calculates APY


Our signals compounded at each order earned an interest that, in relation to the principal, resulted in an APY of 38.52% approximately. It was done by following the formula (decimal format) from the FDIC Law and Regulations (Appendix A to part 230 – Annual Percentage Yield calculation, under 6500 – Consumer Protection)*:

how to calculate apy

“Principal” is the amount of funds assumed to have at the beginning of the period.
“Interest” is the total dollar amount of interest earned on the Principal for the period.
“Days in Term” is the number of days in term of the account.

Which is analogous to:

APY formula

“Days in Term” is the number of days between the first and the last signal.

Also as defined by FDIC § 1030.2 (o)** Interest rate means the annual rate of interest which does not reflect compounding and may be referred as the annual percentage rate (APR). We then defined APR as:

how to calculate return APY

It is possible to compound periodically but not within the period, resulting in a period compound APY(PCAPY) which is the generalized formula of (II).

formula to calculate APY

We could also write:

apy forex trading

To find the value of the “average” interest rate by period which is defined by the previous formula.

how to calculate interest rate

In order to gain interest over interest it is advisable to compound with the minimum possible period length.

In fact our yearly compounded APY is 14.36% over 13 years and our signal compounded APY is 38.52%.

This is why it is highly advisable to update the current amount available to invest in our dashboard so we can compound in the most continuous possible manner, it is not only a matter of increasing profit but mainly to control risk exposure.

For instance, to simulate the results of a person that uses our signals for 20 years and monthly deposits 100 USD, we could compound at each order to maximize the interest over interest or in a more user friendly, updating the amount available, and thus compounding, monthly(MCAPY).

Annual percentage yield APY forex

Notes

  • Given an annual interest rate we may find the monthly interest rate simply by dividing by 12. The converse is also true when there is no compounding involved.
  • The PCAPY returns the APY when the period is one signal and the PCAPY returns the APR when the days in term and the period is one year.

how to calculate returns on forex

By only knowing the APY we can compute (VIII) but not (VII). To compute (VII) we need the information of the not compounding interest over each period. in fact the simulation of 20 years we have:

Case 1 (Using signal compounding APY):

APY best formula

Case 2 (Using the MCAPY):

APY full formula

If a person saves 100 USD at the end of each month and invest with the wise signals over 20 years, he will have 2,459,966.26 USD in case one and 1,566,565.91 in case 2.

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There are two ways to invest with our AI in forex:

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With Automated AI trading you do not need MT4 / MT5 and other trading platforms to invest in forex. All forex trades are automatically placed into your broker account and you can monitor the AI trading performance directly on our dashboard.

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Wiseinvest also provides AI forex signals that perfectly fit into MT4, MT5 and any trading platform. To trade with our AI forex signals, you must simply copy the data you receive from each real-time signal into any forex brokerage account of your choice.

There are five unique variables for each AI signal, and each must be copied exactly, in order to match the performance of the signal as close as possible.

Each AI signal alert consists of the following five data points:

  • Symbol (forex pair)
  • Direction (long or short)
  • Position size (number of units or lots)
  • Take profit (price level to exit with maximum gain)
  • Stop loss (price level to exit with maximum loss)

You can trade forex with our free forex signals clicking here, or with our Premium subscription that provides you unlimited AI signals and automated AI trading in partner brokers. Whether you are a beginner or a Professional forex trader, our AI trading system can help you save time and improve your trading performance. Get started with free AI.

When investing through Wiseinvest automated AI trading or AI forex signals, you do not need to calculate or change the leverage in your forex broker account. Learn more about leverage in forex trading clicking here.

Disclaimer: Forex and Contracts for Difference (CFDs) are complex instruments and come with a high risk of losing money due to leverage. Forex trading is not suitable for everyone. You should consider whether you understand how forex and CFDs work and whether you can afford to take the high risk of losing your money.

The forex brokerages displayed shall disclaim the overall performance of traders in their platforms. Oanda warns that 76.8% of retail forex traders lose money trading CFDs. XTB warns that 80% of retail forex traders lose money trading CFDs. The forex broker Fxcm warns that 69.66% of retail forex traders lose money trading CFDs.

The performances aforementioned are not related to Wiseinvest AI forex trading and AI forex signals system. You can check the performance of our AI forex system on our dashboard.

Sources:

* https://www.fdic.gov/regulations/laws/rules/6500-3270.html#6500appendixatopart230

**https://www.fdic.gov/regulations/laws/rules/6500-3900.html