Buy & hold return

The theoretical return achieved by investing the entire initial capital into the security at the start of the first trade and holding that position until the end of the test period. This serves as the primary benchmark for evaluating the strategy's outperformance.

Exclusions: This metric does not account for active trading. It assumes a static, long-term "passive" position.

Strategic value: Comparing Net P&L to Buy & hold return reveals if your strategy is adding value. If your active strategy returns less than Buy & hold, the trader is taking on extra effort (and potentially extra risk) for a lower reward.