|
PureBytes Links
Trading Reference Links
|
Fellow RT's
Here is a recent analysis I did that some RT's may find of interest.
About every two weeks I go back and look at the prices on closed trades vrs
today's price. This gives me an idea of the efficiency of my trading.
Here are the results for my account.
position
closing price 5/15 price LIQUIDATION EFFECTIVENESS
JMED 29 3/4 30 3/4 -1
EFII 22 1/8 22 9/16 -0.4375
EFII 24 1/16 22 9/16 1.5
SFSK 37 7/8 36 1/2 1.375
ORCL 26 1/16 25 7/8 0.1875
UC 20 3/16 20 0.1875
PSFT 48 3/4 48 1/16 0.6875
QMDC 27 3/4 26 5/8 1.125
XCIT 63 1/4 59 15/16 3.3125
Advantage 6.9375
A positive number indicates the position was liquidated at a price higher
than the current price. This is an indication that we are not liquidating too
quickly and managing the price swings well. In many ways this is more
important than the P/L column in the short term because it tells us how well
we are applying good money management practices. The most important element of
day trading is capital preservation. If that is done well the profits will
come if we are using a sound stock selection process.
This almost seven point advantage in closed vrs current price to almost
$5500 saved as a result of good $ management practices based upon my typical
position sizes.
Some of these trades were closed at a profit some at a loss but this
analysisis designed to look at the efficiency of my trading. Profits measure
the effectiveness of the system, the efficiency looks at how well I managed
my resources.
As the old saying goes "It's not just how much you make but also how much you
keep that counts."
Going back in time and looking at where you liquidated in relationship to the
current price will tell you a more about your trading style than you might
think, and is a consistent practice that many good traders use to refine their
trading skills.
Feedback is welcome.
All the best,
Terry Quinn
|