Daytrader quiz

[easymon1]

Let's say you are a daytrader, and each month has 21 trading days. If you make every 2nd trading day on average 1.50% profit from your current account value, but then lose on average 1.00% the following trading day, then how much will your PnL% be in a year?
Let's say the very first day is a win day.

Online math forum
https://www.dogpile.com/serp?q=Online+math+forum

 

[Sekiyo]

Online math forum
https://www.dogpile.com/serp?q=Online+math+forum

Solved it

 

[earth_imperator]

I'm getting 113.67%

The monthly PnL% is 6.5316%, determined iteratively, ie. in a for loop for the 21 days of the month. Then one can apply the said compound interest formula.

 

[Sekiyo]

Maybe …

What you iterate is 0.3% per day over 21 days.
But your strategy doesn’t deliver 0.3% per day.

More like 0.24% if S1 ( (1.015 * 0.99) ^ (1/2) - 1)
Which means 83% per year ( 1.0024 ^ 252 - 1 )

 

[earth_imperator]

@Sekiyo, no need to calculate the daily rate; just use the monthly rate for 12 periods, ie:
PnL% = 100 * (1 + 6.5316 / 100)^12 - 100 = +113.67%

For the first and last "100" (bold above), one can take the StartCapital. In above calc it simply is $100.

 

[Sekiyo]

Please tell me the % change over 2 days
Once you gain 1.5% then lose 1%

@earth_imperator

 

[Sekiyo]

Please tell me the % change over 2 days
Once you gain 1.5% then lose 1%

@earth_imperator

1.015 * 0.99 - 1
It’s 0.485%

1.00485 ^ (1/2) - 1
In average, per day it’s 0.242%

1.00242206679 ^ 21 - 1
Monthly it’s 5.21%

1.00242206679 ^ 252 - 1
Yearly it’s 83.97%

That’s my last words
Should have been my 1st ones.

Sorry for all the fluff

 

[earth_imperator]

Please tell me the % change over 2 days
Once you gain 1.5% then lose 1%

It's a little bit complicated as well tricky b/c the last day of the month (ie. the 21th trading day) is a win day, and the next trading day (ie. the first trading day of the next month) is again a win day... So, it's not easy to calculate from the monthly result the daily PnL%. Rather one can do it only from the end result...:
1d: 0.30174705107432565300 Yes, you right above: it*s 0.3% per day.
2d: 0.60440461497697182400

 

[Overnight]

This is all fine and good. But does it help you predict where the price of your instrument is going TOMORROW? That is what it important for the day trader, yes?

 

[earth_imperator]

This is all fine and good. But does it help you predict where the price of your instrument is going TOMORROW? That is what it important for the day trader, yes?

With spread-like constructs one is as a daytrader not really bound to the day anymore... One can hold it longer since a loss is automatically capped by the intrinsics of the spread options itself.