If you look at the 4 years I have been showing my equity curve, I have actually grossed $57,179 in profits but after deducting commissions, my net is a loss of -$9065. Most of this gross gain was in 2010 but the bottom line is I have not demonstrated any consistent edge since then that can overcome the cost of commissions.
Delving into the numbers for 2013 below, I noted (no surprise) that my better months tended to be when my Avg$Win/Avg$Loss (Reward:Risk) was higher. On the bright side, ZS was again my best symbol and I also did okay with system trades in 6E.
Looking just at NQ and ZS which I traded most often:
A few more looking at all trades below. The 4th chart isn't as smooth as some past years but once again it proves that it's really hard to produce a consistent winner in the first minutes a trade is open. It takes time to recoup spread, slippage, and commission.
That's it for now. I'll elaborate more on my plan for 2014 in January. My trading may be limited for the short term as I work on plans. Happy 2014 to all!
Posts
You are very, very close to being a net-profitable trader with one little adjustment: let profits run. How many dozens, maybe hundreds of times did you point out where scalping off quick profits killed big-gains eventually to follow? Those big gains captured from most of those trades were the difference between red and black ink. You are literally that close.
ReplyDeleteOne key ingredient to profitable success in trading: cut losses short, let profits run. That axiom is 100+ years old now for good reason. It is true. The edge has to be +2 / -1 if not +3 or greater to -1 for long-term success. No human trader on earth with zero exceptions can create long-term success in today's market world with +1/-1 ratios or similar.
Let profits run in 2014, and you may very well erase ALL net loss from the past four years behind!
Good luck... I'm rooting for you and everyone else to win!
austinp
Simply "letting profits run" will not solve the problem. Increasing a target will decrease your win rate. Whether that proportional decrease in win-rate will be offset by the extra earned from the increased profit target is what would matter.
DeleteRather than worrying about R:R, I woudl think it best to devise a logical and rational reason for exiting as opposed to arbitrary R:R figures. No one but you cares about where you enter the market, and your corresponding targets and stops. Leaving it up to fate to hit a target or a stop is a losing proposition.
good luck in 2014... please continue to write what i consider to be one of the best trading blogs on the internet
ReplyDeleteHappy New Year MBA!
ReplyDelete-AT
As a long time viewer, thanks for sharing your journey. Like most here, i think you are very close to profitability. My advice is to really examine the 3Ms (method, mindset, money mgt) and see where you can improve on each. Litttle tweeks here and there can really make the difference. Failure is your greatest teacher... Best of luck!!!
ReplyDeleteThanks all! :)
ReplyDeleteSo the gist of problem is paying for commission, as long as a trade can cover commission then you will be on the plus side eventually. Paying for commission and stopping out right before it turns around seem to go hand in hand. Take a look a hedging it might solve these problems.
ReplyDeleteThanks but not sure how hedging would help? Hedging positions requires MORE commissions.
DeleteDo you make all these reports yourself? Or is this from the platform?
ReplyDeleteI download all trade data from OEC Trader each day and paste into Excel. All these reports are from Excel and Microsoft Query (comes with MS Office).
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