Monthly Statistics for Real Time Trading for October 2011
10/03/11 10/04/11 10/05/11 10/06/11 10/07/11 10/10/11 10/11/11 10/12/11 10/13/11 10/14/11 10/17/11 10/18/11 10/19/11 10/20/11 10/21/11 10/24/11 10/25/11 10/26/11 10/27/11 10/28/11 10/31/11
Oct 3: +11090 8W 1L, Oct 4: +130072, 43W 9L, Oct 5: +21720 17W 10L, Oct 6: +13602 8W 4L, Oct 7: -6730 10W 14L, Oct 10: -27461 1W 13L, , Oct 11: -2937 14W 7L, Oct 12: +3638 5W 6L, Oct 13: -26876 5W 20L, Oct 14: -13124 6W 14L, Oct 17: -16563, 3W 14L, Oct 18, -21682, 13W, 30L, Oct 19 -12590, 11W 12L, Oct 20: -4202 6W 7L, Oct 21: -758 6W 7L, Oct 24: +9648 7W 3L, Oct 25: -31866 8W 28L, Oct 26: -8877 9W 18L, Oct 27: -11338 7W 5L, Oct 28: +63447 33W 11L, Oct 31: -826 3W 7L
Gross winning trades = $253,217
Gross losing trades = (-$185,720)
Net Gross Profits = $67,497
Number of Markets = 80
Account size recommended to trade all 80 markets = $1,000,000
Number of trades in October '11 = 463
Win = 223
Loss = 240
% Win = 48%
Average Trade Profit (win loss) = $146
Profit/loss for September '11 AFTER taking out $92,600 for transaction costs = (-$25,102)
Combined Statistics for Real Time Trading for December 2009 through October 2011(23 months)
Gross winning trades = $4,085,768
Gross losing trades = (-$1,854,061)
Net Gross Profits = $2,231,707
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 23 months = 6230 trades
Win = 3336
Loss = 2894
% Win = 54%
Average Trade Profit (win loss) = $358
Theoretical Real Time Profits for 23 months AFTER taking out $1,246,000 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 (6230) and multiply by $200 to get $1,246,000. Then subtract $1,246,000 from the Net Gross Profits of $2,231,707 to get $985,707 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 $4 per trade.
Projected Real Time Profits for 23 months on a million dollar account AFTER taking out transaction costs of $1,246,000 .
Divide $985,707 by 23 to get average profit per month or $42,857. Using this average projection we can figure that our profits for one year would be $514,281 (12 X $42,857) and that comes out to an annual return of 51.42% on an investment of $1,000,000.