Monthly Statistics for Real Time Trading for February 2010
2/01/10 2/02/10 2/03/10 2/04/10 2/05/10 2/08/10 2/09/10 2/10/10 2/11/10 2/12/10 2/16/10 2/17/10 2/18/10 2/19/10 2/22/10 2/23/10 2/24/10 2/25/10 2/26/10
STARTING JULY 1, 2010: Please note. In late June 2010 I made a decision to yield to the many money managers and high worth individuals who periodically contact me. They do not feel that my committing only $20,000 to our portfolio or $500 to each stock position is very helpful to them for understanding how this methodology can work when trading substantially larger sums of money. And quite honestly it is the money managers and high worth individuals who usually buy my stuff. Therefore I am bumping up our portfolio by a factor of 50 from $20,000 to $1,000,000. However the software I sell can be adjusted to any account size and I still maintain you can start with as little as $3,000. Please note also that I am not adjusting the individual days going back to December 1 2009. If you want to adjust those figures to match what we are presently reporting you need only multiply the figures by 50. I have, however, adjusted the individual months to reflect the larger dollar amounts.
Gross winning trades = $152,700
Gross losing trades = (-$36,100)
Net Gross Profits = $116,600
Number of Markets = 96
Account size recommended to trade all 96 markets = $1,000,000
Number of trades in Feb. '10 = 225
Win = 125
Loss = 100
% Win = 56%
Average Trade Profit (win loss) = $518
Theoretical Real Time Profits After Transaction Costs:
I am going to call this the "Pajama Trade Formula (see my article PAJAMA TRADING) for calculating a reasonable projection of transaction costs. I have traded accounts ranging from $6,000 to 6,000,000 and the figures I present here seem reasonable based on my experience. Actually I think I can do better than this formula calculates, but you may do worse than this formula calculates until you have had some practice and experience. Nevertheless pajama trading is not that difficult to learn and is the only way to go to effectively cut transaction costs.
To calculate transaction costs simply take the total number of trades (225) and multiply by $200 to get $45,000. Then subtract $45,000 from the Net Gross Profits of $116,600 to get $71,600.
Using $200 for transaction costs is a little arbitrary but is reasonable based on my experience. Most people will be trading much less than one million dollars and if that is the case I would recommend to seek out brokers charging no more than $5 per trade (some will do it for as little as 40 cents).
Projected Real Time Profits for February '10 after taking out transaction costs of $45,000.
Divide $71,600 by 1 to get average profit per month or $71,600. Using this average projection we can figure that our profits for one year would be $859,200 (12 X $71,600) and that comes out to an annual return of 85.92% on an investment of $1,000,000.