Unfortunate. There's a solution though.
The returns calculation is (portfolio_value - starting_capital) / starting_capital.
In that equation, portfolio_value jumped with added cash while starting_capital remained the same, so the returns jumped upward also.
A way to address that: (POSITIONS_value - amount_risked) / amount_risked
...where amount_risked is the amount exchanged for stocks (plus commissions).
It is the maximum drawdown on the starting_capital.
Starting cash in IB: $10,000
Amount spent in exchanging cash for stocks: $10,000 (the entire amount)
Portfolio after some time, hypothetically: $11,000 (made $1,000)
($11,000 - $10,000) / $10,000 = 10%
Later add an additional $5,000 to the current $11,000 in the account.
Returns by current calculation:
(portfolio_value - starting_capital) / starting_capital
... ($16,000 - $10,000) / $10,000 = 60% -- wrong
Returns by this suggested new calculation:
(POSITIONS_value - amount_risked) / amount_risked
... ($11,000 - $10,000) / $10,000 = 10% -- correct
(POSITIONS_value - amount_risked) is profit.
Profit / amount_risked is always the returns value we're interested in.
A certain amount of money was put to work by transferring it into something other than cash, how well did it do.
The problem is, when we transfer money into a broker account, we immediately have a "portfolio" value, even though none of it has yet been put to work, it has not yet really been invested until a transaction is made.
Shorting adds an element to sort out, possibly its risk is any value beyond cash to cover, I'm not sure about that part.