Monthly Statistics for Real Time Trading for December 2011
12/01/11 12/02/11 12/05/11 12/06/11 12/07/11 12/08/11 12/09/11 12/12/11 12/13/11 12/14/11 12/15/11 12/16/11 12/19/11 12/20/11 12/21/11 12/22/11 12/23/11 12/27/11 12/28/11 12/29/11 12/30/11
Dec 1: +44542 31W 16L, Dec 2: +2660, 6W 5L, Dec 5: +2144 9W 8L, Dec 6: -375 10W 9L, Dec 7: +5132 5W 7L, Dec 8: +2446 5W 7L, , Dec 9: -28403 10W 30L, Dec 12: +0 0W 0L, Dec 13: -0 0W 0L, Dec 14: +50251 36W 10L, Dec 15: -9024, 1W 6L, Dec 16, -856, 7W, 7L, Dec 19 -30101, 4W 20L, Dec 20: -36971 6W 17L, Dec 21: +661 20W 18L, Dec 22 -21244 4W 12L, Dec 23: +10054 13W 6L, Dec 27: -0 0W 0L, Dec 28: -0 0W 0L, Dec 29: +22917 22W 26L, Dec 30: +3325 4W 1L
Gross winning trades = $143,412
Gross losing trades = (-$126,974)
Net Gross Profits = $16,438
Number of Markets = 80
Account size recommended to trade all 80 markets = $1,000,000
Number of trades in December '11 = 356
Win = 185
Loss = 171
% Win = 52%
Average Trade Profit (win loss) = $46
Profit/loss for December '11 AFTER taking out $91,000 for transaction costs = (-$54,762)
Combined Statistics for Real Time Trading for December 2009 through December 2011(25 months)
Gross winning trades = $4,388,696
Gross losing trades = (-$2,148,830)
Net Gross Profits = $2,239,866
Number of Markets = 80
Account size recommended to trade all 80 markets = $1,000,000
Amount of money committed to each trade if traded on margin = $25,000
Number of trades in 24 months = 7041 trades
Win = 3740
Loss = 3301
% Win = 53%
Average Trade Profit (win loss) = $318
Theoretical Real Time Profits for 25 months AFTER taking out $1,408,200 for Transaction Costs:
Please Note: On June 15 2011 we started trading from both the long and the short side. From 4/30/11 to 7/29/11 we encountered a nasty draw down of $184, 652 (22%) from our previous equity high.
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 (7041) and multiply by $200 to get $1,408,200. Then subtract $1,408,200 from the Net Gross Profits of $2,239,866 to get $831,666 in real time profits.
Using $200 for transaction costs is a little arbitrary but is reasonable based on my experience trading million dollar accounts. 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). The transaction cost figure of $200 includes slippage and is an estimate for a million dollar account. But the transaction costs will be much lower for a smaller account. For example the transaction costs on a $5,000 account may only be about $3 per trade.
Projected Real Time Profits for 25 months on a million dollar account AFTER taking out transaction costs of $1,408,200 .
Divide $831,666 by 25 to get average profit per month or $33,267. Using this average projection we can figure that our profits for one year would be $399,199 (12 X $33,267) and that comes out to an annual return of 39.91% on an investment of $1,000,000.