I have been looking at a number of trades in your journal and have a few questions and comments. It seems as you said earlier that you are doing a RTM type style. Why do u not use stops? Many of your losers are around 2.5-3% of your trading capital. When i loook at specific trades when they go against you rather hard you seem to wait for it to come back in your favor. It worked for KLAC trade but IMHO that was a poorly managed trade. You tolerated a $2.77 drawdown on that trade. It appears you had no stop loss. Did you have a stop? If so where was it? If you had a stop then what amount of capital do you risk per trade. 1.5-3% capital risk is quite high for a system that has 58% winners. I think you will likely get very big drawdowns with this method even if you have yet to experience them. I would advise 2 things...1) change your broker to reduce commissons. You trade about 200 trades a year....thats nearly 8000 in commissions per year that you have to overcome before you even make a penny. 2) run a Monte Carlo sim on your data and you will see that at your current level of risk per trade you would eventually experience very large drawdowns. I rec reducing your position size per trade and reviewing you profitable trades. That way you can see what went well and what did not. Then do more of what works and less zof what does not. It seems you have a system with alot of potential here. I think you need to tweak it and your trade management a bit and you will do even better. Good Luck
Hi there. Yes, I don't use stops. My research shows that for the type of mean-reversion trading that I do, stops degrade trading performance. What I do to protect capital is by 1. not investing more than 20% of capital per stock, and 2. to go both long/short at the same time. These tend to be more effective at reducing drawdowns/losses than using stops, at least of course with the type of trading that I do. Thanks.
Good luck with that. I think you are playing with fire and will likely have HUGE draw downs on your account. Right now you have been lucky. An acct with 58% winners and where losses are nearly 2.5% of your capital is going to have major draw downs....ESPECIALLY one with 400 trades per year an $40 round trip commissions.!!!. Trust me on this. Do a MC sim with you data and you will see I am correct. I have nothing to gain by telling you this. I was in your shoes at one point in my life and thought no stops were the way to go. It is a recipe for disaster. Good Luck.