Compounding For Success

[Pazienza]

Paz

What's a "win"? Finishing up on the plus side, meeting target, or what.

Maybe better to think in terms of return on risk (R).

So, on that basis, your return is somewhere along the range of -1R to +xR and your job is to keep the average above zero and rising if you can. From that perspective your b/e trades have helped a bit since you kept the trades above -1R.

jon

A win or a loss would be any result positive or negative that wasn't absolutely minuscule. So for example, £1,000 risked per trade, £50 either way I'd call break even. I'm just not comfortable with calling a 0.05R win a "win".

Taking the last month again, my average win has been 3% (1.2R) and my loss was 2.1% (0.84R). Average net return per trade (excluding break even trades) was 2.53% (basically a sliver over 1R). My return over the month(without compounding) is 27.9%, or 11.16R.

My trailing stop method does tend to mean I avoid full looses - over time the average loose is in the region of around 0.7R I think, although I'd have to check this.

My average