It’s a bit of a milestone here at The Capitalist Trader, as I recently closed out the 50th trade in the account since its inception on October 1, 2016. So without further ado, here’s a breakdown of the performance.
Winning Trades: 32 (64%)
Losing Trades: 18 (36%)
Average win: 2.57% (of account value)
Average loss: 1.22% (of account value)
Odds (avg. win / avg. loss) = 2.11 : 1
Edge: (64% x 2.11) – (36% x 1) = 99% (!!!!!!!!)
Kelly Value: Edge / Odds = 47%
My current risk per trade: Kelly / 4 ~ 12% (of account value)
By the way, that edge value of 99% is also known as expectancy, and it means that for each dollar I risk, I expect to gain 99 cents over and above a return of the risk. So for the first 50 trades, I almost doubled each dollar that I risked. That’s a little insane, so I wouldn’t be surprised if that number drops a bit over time. Still…. sheesh! 🙂
These 50 closed trades took about 10 months to complete, so that’s about 5 closures a month based on my current trading methodology. During that time, the account gained a bit over 60%. Here’s a visual representation of those first 50 trades.
What I had was a lot of little gains and a lot of little (smaller) losses. These were accompanied by a few pretty good gains and one huge one of almost 40% of the account’s value at the time. There were also four or five significant losses, including the 50th trade itself.
This excessive volatility in some cases is what prompted me to revise my risk management approach a bit, so I’m looking forward to a less wild ride in the future.
To get more details on how I trade, take a look at the Trading Profitably page.
Stay tuned, and…keep pipping up!
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