Calculating Wins & Losses
- Thread starter Andre
- Start date
I don't feel that I am fooling myself because...
That's why I asked the question, I don't want to fool myself.
I agree. The number of wins vs. losses is irrelevant. It is possible to have a win/loss ratio of 10 and still lose money over the long haul.
Of course. I don't place the win/loss ratio as being more important than other measures. I'm following it closely now mostly for the exercise. In some ways, it's helping me with my risk and discipline. I'm getting in and getting out better. I'm locking in profit (also a win). I think it's also helping me look at the stocks I follow as new positions each time, and not get hung up on past price levels, if that makes sense. Anyway, it's an exercise.
I had another set of trades that bring up a different dilemma. I bought 100 shares, and over a week it dropped 30 cents. I didn't really have a hard stop on this one. But it looked like it found a bottom. I bought another 100. It popped a bit and dropped back. Still thought it was bottom. I bought 100 more. And it popped, but not much. Didn't like what it was doing, so I sold all 300 shares, (and a good thing too).
In short, I still had a biggish loss on the first batch, and minor gains on the next two. But the second two positions where definitely different charts for the entry. One position, two or three?
I could say that the example I gave earlier of buying 300 shares and selling them 100 at a time was/is similar in that the charts were up and down over several days. It wasn't like I was following a trend.
And also, no-one commented on how you book a position where the buy is different, but the sell is the same? Also, do folks factor just points or include commissions? This one where I had 6 different entries an one exit... with commissions was an overall loss. But by points, it averaged a gain. I guess I answered that question myself. It's about the money. If I'm losing overall... it's a loss.
I appreciate the comments so far.
André
That's why I asked the question, I don't want to fool myself.
I agree. The number of wins vs. losses is irrelevant. It is possible to have a win/loss ratio of 10 and still lose money over the long haul.
Of course. I don't place the win/loss ratio as being more important than other measures. I'm following it closely now mostly for the exercise. In some ways, it's helping me with my risk and discipline. I'm getting in and getting out better. I'm locking in profit (also a win). I think it's also helping me look at the stocks I follow as new positions each time, and not get hung up on past price levels, if that makes sense. Anyway, it's an exercise.
I had another set of trades that bring up a different dilemma. I bought 100 shares, and over a week it dropped 30 cents. I didn't really have a hard stop on this one. But it looked like it found a bottom. I bought another 100. It popped a bit and dropped back. Still thought it was bottom. I bought 100 more. And it popped, but not much. Didn't like what it was doing, so I sold all 300 shares, (and a good thing too).
In short, I still had a biggish loss on the first batch, and minor gains on the next two. But the second two positions where definitely different charts for the entry. One position, two or three?
I could say that the example I gave earlier of buying 300 shares and selling them 100 at a time was/is similar in that the charts were up and down over several days. It wasn't like I was following a trend.
And also, no-one commented on how you book a position where the buy is different, but the sell is the same? Also, do folks factor just points or include commissions? This one where I had 6 different entries an one exit... with commissions was an overall loss. But by points, it averaged a gain. I guess I answered that question myself. It's about the money. If I'm losing overall... it's a loss.
I appreciate the comments so far.
André
Fortunately for me, most of my trades fit into easy rules, it's pretty rare that I have multiple entries and exits as I described. On the other hand, if I did have plenty of the "confused" trades I described, I'd undoubtably have a system of determination I was happy with.
And, it doesn't really matter the definition I use anyway, as long as I am consistent about it. If I see a change in trend in my W/L, then I look for an explanation.
Also, I am not sure it is important (only in my first year of full time trading). I just track it because it seems useful, and heck, it's pretty easy. I've prolly spent more time on this thread than I have tracking my W/L for the year.
So I guess I should amend that post to say that "I think it's important" rather than "it is important". I apologive for that, and I'll tend to it immediately.
EDIT: Nuts. 60 minute time limit on edits. I guess I'll have to let my misspeak speak.