Float: the number most merchants never measure
How much capital you hold, and how long it sits idle, decides your real return more than your spread does. Almost nobody tracks it.
Spread is not return
Two merchants can run the same spread and end the month with completely different results, because one turned their capital over twelve times and the other turned it over four.
Spread tells you what you make per cycle. Turnover tells you how many cycles you got. Only the two together tell you what your money actually earned.
Idle money is a cost
Capital sitting between a buy and a sell earns nothing and carries currency risk the whole time it waits. In a volatile week that is not neutral, it is a slow leak.
Merchants tend to notice the leak only when the currency moves sharply against them, which is the most expensive possible moment to learn it.
What to actually watch
Three numbers, none of which any exchange dashboard will give you.
- Average time between buying and selling the same value.
- How many times your capital cycled this month.
- Profit per unit of capital, rather than profit in total, which flatters anyone who simply traded bigger.