Search This Blog

Monday, January 7, 2008

Sugar #11 and Money Management recap

Ok, we've had our first options trade, at a loss. Here's the money management numbers as they stand for the Challenge Accounts.

Total Trades and Investments: 1
Largest Inter-trade Drawdown: $86.51 (Including Commissions)
Consecutive Losing Trades (Drawdown): 1
Average Drawdown: $86.51
Accuracy Rate: 0%
Average Reward: $0.00
Risk / Reward Ratio: N/A

Too little data to draw any conclusions whatsoever. Our attempted goal on the Sugar trade would have been .21, or $235.20, which places our risk / reward ratio at 1:2.71 - which is a great ratio and will serve us with a system that runs 50%. On all of my public trades (not including investments, or private trades) for the last year, with the above trade, here are my stats:

Total Trades and Investments: 16
Largest Inter-trade Drawdown: $86.51 (Including Commissions)
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $39.30
Accuracy Rate: 81.25%
Average Reward: $207.85
Risk / Reward Ratio: 1:2.05 (1 risk to 2.05 reward)

So the money management numbers are in good shape. Now moving on to the Challenge Accounts. The number one goal here is preserving account equity. Trading optionsXpress account now would be a bad move, as the capital isn't there with only $483.49. $100 is incoming on the 23rd of this month to that account, raising our account to $583.49, which still has our account larger than where it was at the end of December. As far as future trades, we'll have to see. If I see another trade where there are good technicals and fundamentals my risk is under $100.00 and the risk / reward ratio is good, then I'd take the trade.

* * *

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment advisor, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders

Search Investing and Trading Articles and Products