Monthly Statistics for Real Time Trading for February 2011
2/01/11 2/02/11 2/03/11 2/04/11 2/07/11 2/08/11 2/09/11 2/10/11 2/11/11 2/14/11 2/15/11 2/16/11 2/17/11 2/18/11 2/22/11 2/23/11 2/24/11 2/25/11 2/28/11
Feb 1: +12365 5W 1L, Feb 2: +21002, 13W 9L, Feb 3: +2523 8W 7L, Feb 4: -3738 4W 8L, Feb 7: +6573 5W 3L, Feb 8: -6397 5W 12L, Feb 9: +9686 5W 3L, Feb 10: +2426 2W 3L, Feb 11: +1404 4W 4L, Feb 14: +28489 12W 8L, Feb 15: +804, 4W 8L, Feb 16, +3992, 2W, 0L, Feb 17 +3322, 6W 4L, Feb 18: -2786 6W 5L, Feb 22: -383 0W 2L, Feb 23: -2772 0W 1L, Feb 24: +0 0W 0L, Feb 25: +4794 5W 1L, Feb 28: +2158 5W 2L
Gross winning trades = $99,548
Gross losing trades = (-$16,136)
Net Gross Profits = $83,412
Number of Markets = 75
Account size recommended to trade all 75 markets = $1,000,000
Number of trades in February '11 = 172
Win = 91
Loss = 81
% Win = 53%
Average Trade Profit (win loss) = $485
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 (172) and multiply by $200 to get $34,400. Then subtract $34,400 from the Net Gross Profits of $83,412 to get +$49,012.
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 2 dollars).
Projected Real Time Profit for February '11 AFTER taking out transaction costs of $34,400.
Divide +$49,012 by 1 to get average profit per month or +$49,012. Using this average projection we can figure that our profit for one year would be 588,144(12 X 49,012) and that comes out to an annual gain of 58.81% on an investment of $1,000,000
Cumulative to Date Real Time (15 months):
Projected Real Time Profits for 15 months, December 2009 through February 2011, AFTER taking out transaction costs of $698,200. Maximum equity draw down is still less than 10%:
Divide $802,968 by 15 to get average profit per month or $53,531. Using this average projection we can figure that our profits for one year would be $642,374 (12 X $53,531) and that comes out to an annual return of 64.23% on an investment of $1,000,000.