Annualized Return is a linear extrapolation of your year-to-date percentage gain to the full 365-day window. Up 4% on day 90 of the year? Annualized = 4% × (365 / 90) ≈ 16.2%. The mechanic is simple division; the value of the metric is that it puts a 90-day track record and a 365-day benchmark on the same axis.
It is not a forecast. The implicit assumption — that performance continues at the same daily clip — is almost always wrong. A great Q1 looks unreal when annualized; a brutal Q1 looks dire. Read it as a normalization for comparison, not a prediction.
April 15 (day 105 of the year). Net P&L = €750 on €10,000 starting capital. YTD = 7.5%.
How to read it without fooling yourself: - Compare to passive benchmarks — long-run S&P 500 averages ~10% annualized. If your annualized hovers below 10% over a full year, the active management isn't beating the index. - Discount the early-year reading — at day 30 your annualized number divides by 30 and multiplies by 365. A modest €300 gain becomes a 36% "annualized" projection. Don't celebrate — the variance is enormous over a small sample. - Late-year reading is sturdier — by day 250+ the annualization factor is small enough that the number is close to the actual annual outcome. October through December is the honest read. - Pair with Max Drawdown — a 30% annualized at 5% drawdown is a different animal than 30% at 25% drawdown. The Calmar Ratio article explicitly captures this trade-off.
TradeOnyx shows Annualized Return as a KPI tile in the Overview tab, but only when the period filter is set to Year. On shorter windows it's hidden — projecting a one-week return to 365 days is a noise generator, not signal. The hint underneath spells out the math ("7.5% YTD over day 105") so you read the projection with full context, not just the bottom-line number.
Direct pairing: the S&P 500 YTD tile renders next to it on the same Year-period view. Now you have your own annualized projection and the index's own YTD on screen at the same time, no manual math, no second tab. The honest question — "is the time, the screen-time, the stress, the tax friction worth the active premium?" — has its data right there.
The Annualized tile is also where the trader who's secretly stressed about a hot start gets a reality check. Up 8% in the first six weeks reads as +69% annualized — which sets an unsustainable mental anchor. Knowing that's the math, not the prediction, is half the discipline.