Last week I did a wrap of the K7 strategy. You can view the details of it here.
I thought it would be useful to post a graph/chart of my results for the 300+ trades (the charts include the trades until the end of today’s session so 331 trades all in all). I have posted one graph of all the trades and one graph excluding the trades that i took whilst on a visit to the US a couple of months ago. I feel that the latter is a more accurate reflection of my current trading competence.
A word on transaction costs – I keep a very close eye on transaction costs – and am now averaging around 6% (I have averaged 5.4% since negotiating lower commissions with my broker). By % I am referring to the cost of bid-ask spread and commission (expressed in pips or points) as a percentage of my stop loss in pips/points for a given trade. Example: On the DAX I have a spread of 1 point (and no commission) – if my stop is 40 points – then my transaction cost is 2.5%.
The graphs show that the transaction costs alone would have taken 15-19R (units of risk) of my trading capital after 330 trades – which is rather amazing. I feel that retail traders tend to regularly underestimate the impact of transaction costs on their trading. Hopefully the charts provoke some thinking in this regard. The graph is a good illustration of the comparison I made between trading costs and playing roulette at a casino in a blog post some months ago.
The bottom chart indicates that at present I am basically a scratch trader – I break even from my trading. So I guess it only needs a bit more improvement and learning for me to become a profitable trader.
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