Here's my account graph for the month:
Here's my account graph since I started trading. I'm actually back below where I started. I tried to focus on smaller, consistent profits this month but instead I had small, consistent losers. I actually did better in the summer when I had huge winners that were able to compensate for any small losing trades.
Here's my trades for the month. Just like last month, way too much red....
I had some tough breaks too. My RMTI trade was one, where I was up $500 and had it disappear within seconds and ended up taking a $110 loss instead. Of course, if I had just held it a few days longer, I would've had that profit back and more.
Of course, I also spent a lot of time this month experimenting. I messed around with prehit buys a lot early in the month. And shorts got tough towards the end of the month with the strongly rebounding market. And it seemed I was always long at the wrong times and short at the wrong times.
Here's the stats. In fact, my average daily loss and Sharpe Ratio is actually worse than October:
Starting account value: $10326.86
Ending account value: $9803.37
Total loss: $-523.49
Total loss (%): -5.07%
Average daily loss: -0.3%
Average daily P/L: -$32.72
Annualized return: -110%
Sharpe Ratio: -2.81
Maximum Drawdown: -7.3%
Total commissions paid: $513.10
Total # trades: 31
Total # winning trades: 12
Total # losing trades: 19
% winning trades: 38.7%
Average # trades per day: 0.97
Largest # consecutive winners: 2
Largest # consecutive losers: 4
Positions held long: 17
Positions held short: 14
Largest winning trade: $343.30 (NAK)
Largest winning trade (%): 11.1% (ABD)
Largest losing trade: $-150 (LTM)
Largest losing trade (%): -11.32% (VCSY)
Average overall trade: -$20.10
Average overall trade (%): -0.92%
Average winning trade: $97.03
Average winning trade (%): 4.52%
Average losing trade: $-94.08
Average losing trade (%): -4.36%
Total # trading days: 16
# green days on account: 7
# red days on account: 8
# neutral days on account: 1
Risk/Reward Stats:
Average 1R: $115.67 (this is the average amount of money I risked to lose per trade based on my stop losses)
Expectancy: -0.03 (meaning I lost $3 for every $100 I risked)
Expectancy Ratio: -0.03 (a good trading system should be 0.25 or more)
Overall, my stats weren't so hot this month, and in some ways were my worst ever. For example, an average winning trade of only 4.52% is pitiful....normally it's been double that of my losers. Of course, I did a TON of experimenting this past month...trying new trading methods and styles.
But now it's time to get back to the bread and butter....buying breakouts and shorting breakdowns. That means reducing the number of plays I do. Switching to Interactive Brokers will help in both reducing commissions and reducing the number of trades I do.
Some of you have said that maybe I've been too hard on myself with making my rules more and more strict. But this is a necessity because I'm trying to really hone in on what gives me the best odds of success on a small number of trades. When you look at Il Torello's stats, he's had very few trades and he's up over 30%. This is why I'm making my rules as strict as possible...keep my number of trades low and my odds of success high per trade. Staying away from shorts that are strongly tied to the overall market should help with my short success.
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20 comments:
Hey Yng, hope December will be much brighter for you!
Anyway sorry to go off topic, but I'm a statistics junkie (as you can see in my blog) and I just love the way you have everything calculated, is it some kind of software or automatic system? is this IB?
Also - I just discovered that I can transfer to IB without having to have $10K because I'm under 21, I JUST started trading, would you recommend that? (question is: would they require me to complete once I hit 21?)
Yeah, I'm a stat junkie too! In fact, one of my published papers was a stat-heavy meta-analysis.
I just use Excel to calculate all my stats. It's automatically set up to do so.
Yeah, I would recommend IB if you can do it for the cheaper commissions. And, as far as I know, they won't require you to go up to $10K once you're 21, as your account will already be open.
I actually went ahead and tried opening an account with the guys, they require all kind of fancy stuff like specify that you have "extensive" knowledge in stocks and make more than $40,000 a year - being a soldier in manadatory service and 19 years old doesn't help reach this, I am well-supported financially, I have assets that exceed $100,000, but my monthly income isn't that big..meh, oh well..I'll see if I can get a support rep to help me..
Should I just state what they require and not worry about being asked for proof? did you face the same requirements when opening Yng?
by the way, anyway you can forward me that fancy Excel sheet? just for the formulas, don't worry :P
Are you trading full time? Or part time?
Part time
I had to answer all those questions too. I never had to prove any of it, though.
Regarding the Excel spreadsheet, I shouldn't have said that it automatically calculates anything. A lot of it I have to calculate by selecting a set of cells and then looking at the mean or something like that. I just keep a running tab on every trade and then run the stats that way. But I can still send it to you...just tell me where to send it
Wow Yng! Holy crap your stat analysis is so cool! I'm a stat junkie also. Keep your chin up. Trading is one of the hardest and most stressful things to do in the world I've heard. I've had plenty of bumps and bruises myself, along with quite a number of expensive lessons, mostly from the lack of discipline and patience. I sat back, stopped trading for a bit, and re-evaluated my strategy after my losing streaks. Yes that's with an "s"! I also changed my motto to "Get Rich or Die Tryin." Hang in there and start December fresh...and you have IB!
Thanks, Torello!
Yes, December is a fresh start. I honestly think my more strict shorting rules will help. I've been doing some back-testing and they seem to improve my odds.
We'll see how my watchlist fares on Monday.
Does your work schedule allow enough flexibility for monitoring the markets and trading at the same time during business hours?
Certain professions such as being a pilot or driver definitely might only allow people to enter their orders during non-business hours.
I live on the West Coast, so I do most of my trading in the morning before I go to work (market opens at 6:30 AM PST).
I then take my lunch hour (noon PST) which is the last hour of trading. So it works well for me.
Interesting schedule. Do you open trades and make sure you have stops in place when you go to work?
What about profit taking? Do you use trailing stops, or do you usually just wait till closing hour or the next day to close a trade?
I have a desk job so I keep a window open so that I can keep an eye on any open positions that I might have. But I won't actively trade during that time
I just wanted to comment that you have TWO blogs?!?! I can barely keep up with one! Great job. I need to hire you for nutrition counseling.
I think the people that tell you not to be hard on yourself mean well, but you are doing the right thing. Strive for excellence, and never give up. That's what I'm doing, and I'm thankful that we've had some excellent mentors along the way. Something tells me that things are going to change in the near future, but that's probably always a true statement. Keep on keepin' on Yng.
Hey, Johnny! Thanks for the comment! Yeah, I think I'm going to turn it around in December...it's just a matter of keeping the rules that seem to work and throwing out the ideas that don't seem to work. It's a matter of honing in on and perfecting my system of doing things.
Yep, 2 blogs....the health one is part of my day job...I get kind of blogged out sometimes!
Thanks for all your great insights and posts. You're definitely one of the guys I've learned a lot from since I've been getting into this.
Oh, and I love your new avatar haha
Hey looked at your spreadsheet, what stood out to me was the number of % losers that were over 3%. First thing that came to mind was it looks like the easiest place to start is by making sure that you just get out fast as soon as that thing doesn't go your way. Force yourself to stick to a 3% stop, mental or trailing or otherwise.
Are you keeping track of what you wouldn't have done/not done w/ the losing trades? write all that stuff down and start to make a rule book for yourself.
Adam,
Yeah, I keep track of what I would've done/wouldn't have done with the losing trades...it's just not shown in the picture because it makes the picture too large.
Regarding the % losses:
1. Some of those were with small pennies, where I had a small position, and I allowed a bit more loss because you need to with those small pennies and the $ loss wasn't very high (like VCSY or QI)
2. Some of them were fast moving and by the time I got out, the loss was more than 4% (like TMA)
3. One spiked near the close when I was out of day trades and I couldn't get out until the next day (CVI)
3. I've found in the past that if my stop is TOO tight, I can get shook out of a winning trade. Thus, my stops are 3-5% and not a hard/fast 3%. Muddy himself said in an interview that when he had a 3% stop loss, he didn't do as well because he would get out of too many winning trades.
My losses this month weren't really due to having a slightly more flexible stop...they were due to experimenting with some new methods, and with choosing some setups that weren't high probability setups in hindsight
Maybe Adam is onto something in terms of risk management. Just like reducing the hit from commissions, if you had a tighter or stricter stop rule, you would increase your P by reducing L. I know you have to let trades breath, and obviously, you need the winners to be bigger, but I'm finding quickly how transaction costs and just a few losing trades eat up the green.
by the way, i wrote my comment at the same time as your response to adam, fyi.
Another note, given my position sizes, a 1% change in my stop loss would only amount to about $30. Yeah, that could add up over time, but when I look at my notes for a lot of my trades, many of the losers are trades that I would've never gotten into in the first place given my more strict rules now for setups. And, my average loss was about 4%, which I feel is fine...I just had too many losers, which means my setups weren't good (although a few were good setups that I just screwed up my execution)
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