Use Breakeven Trades in your Data Collection

algofy · Jan 22, 2017

Crashed said:
Another suggestion is to see if the scratched trade would have been a winner or not. winner=do not add in stats. loser= add in stats as a loss.

Although this doesn't solve the problem of screwing up your risk reward ration and win%

SimpleMeLike · Jan 22, 2017

Gotcha said:
MAE and MFE are great, but the worst thing about them is that it only tracks the position while the trade was open, and not what would have happened. What I mean by this is that if you take that BE trade, perhaps it shows you that at one point you had an MFE of 4 ticks before getting out BE, but these stats will never show you how often it goes on to hit your target before hitting your stop. I wish there was some sort of backtesting software that did this for actual trades taken, but I don't think so. I'm not so much concerned about what happens during the trade that I took while it was on, but rather, what would have happened if I just left the trade alone to hit different combinations of stop and target.

Thanks Gotcha,

I agree MAE and MFE is only for time in trades. Therefore, I also calculate MAX Win and MAX loss if stopped out or Breakeven and price goes in my favor. Call it Max trade potential. I do this to eventually track the potential of a winner. I don't record it if price goes way beyond stop loss for a loss I can not tolerate per my max capital protection.

However, once I enter a trade, I do not like to play with the trade. If I stop out, that is just how it goes. All I have in my favor is my past history performance and my notepad open for ideas to consider "later" to improve results or just try another idea. But first thing first is to make some money with what I got. I am not too worry about optimizing yet. Besides moving my breakeven up 1 tick to cover commission cost from now on. And even that may skew the data.

Buy1Sell2 · Jan 23, 2017

SimpleMeLike said:
I didn't know that. So if commission per trade is -$12, that counts as a loss even though its a breakeven trade?

It's money.

SimpleMeLike · Jan 23, 2017

Handle123 said:
If I lose one penny, that is subtracted from my account, so it is a loss to me.
It is why I stress always take a tick in ES so it pay the fees and lunch no matter what size one trades.

Handle123, so if you take the tick in ES, would you count this a win in the win column of your spreadsheet or whatever you use to track your performance?

Thanks

Handle123 · Jan 23, 2017

SimpleMeLike said:
Handle123, so if you take the tick in ES, would you count this a win in the win column of your spreadsheet or whatever you use to track your performance?

Thanks

Yes, it is either a plus or negative. And should it somehow end up exactly 0, I count it as losing trade. Reason why is you are paying each day for equipment, rent/real estate taxes, leasing, electric etc., I don't trade to make nothing.

SimpleMeLike · Jan 23, 2017

Handle123 said:
Yes, it is either a plus or negative. And should it somehow end up exactly 0, I count it as losing trade. Reason why is you are paying each day for equipment, rent/real estate taxes, leasing, electric etc., I don't trade to make nothing.

Handle123,

Thank you for response.

I didn't think of it that way.

In my stats so far I have 54 breakeven trades for $3 round trip commission, where I breakeven at a loss profit of -$3.

So now I take those 54 losses and add to the total loss column count. So number of losses goes up by 54?

algofy · Jan 23, 2017

SimpleMeLike said:
Handle123,

Thank you for response.

I didn't think of it that way.

In my stats so far I have 54 breakeven trades for $3 round trip commission, where I breakeven at a loss profit of -$3.

So now I take those 54 losses and add to the total loss column count. So number of losses goes up by 54?

What are you trading for a 3 dollar commission? ES?

Handle123 · Jan 23, 2017

SimpleMeLike said:
Handle123,

Thank you for response.

I didn't think of it that way.

In my stats so far I have 54 breakeven trades for $3 round trip commission, where I breakeven at a loss profit of -$3.

So now I take those 54 losses and add to the total loss column count. So number of losses goes up by 54?

Can you go to grocery store with the 54 trades and buy anything? At how many trades at losing $3 will buy you are new car or your kid's college? You see it as 3 bucks, I see it much larger. If you not doing this to make the most money you can, you trading for wrong reasons. What would a ten lot be and you take 10 trades each day and loss 'just" $3 bucks. Roughly $78,000 a year.

SimpleMeLike · Jan 23, 2017

algofy said:
What are you trading for a 3 dollar commission? ES?

Thanks algofy,

I am trading CL.

SimpleMeLike · Jan 23, 2017

Handle123 said:
Can you go to grocery store with the 54 trades and buy anything? At how many trades at losing $3 will buy you are new car or your kid's college? You see it as 3 bucks, I see it much larger. If you not doing this to make the most money you can, you trading for wrong reasons. What would a ten lot be and you take 10 trades each day and loss 'just" $3 bucks. Roughly $78,000 a year.

Thank you Handle123,

It makes sense now. I get it now. A loss is a loss, regardless why it loss money. It counts as a loss and should be used in performance metrics.

Thank you.