Use Breakeven Trades in your Data Collection

Discussion in 'Risk Management' started by SimpleMeLike, Jan 21, 2017.

  1. Hello,

    When calculating win to loss ratio, risk vs reward, expectancy, etc, do you consider breakeve trades (money loss due to breakeven commission) as a loss?

    Thanks
     
  2. Handle123

    Handle123

    Yes
     
    tommcginnis likes this.
  3. Thank you Handle123,

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

    tommcginnis

    They definitely must be counted, but I have found it illustrative to go both ways -- count flats ($0 profit, with round-trip commissions waiting like a vulture to be counted) as both losses, and then separately, as winners. If I'm evaluating a technique, I count 'em as winners -- that makes the technique I'm evaluating look rosy, and I just feel *so* smart then..... But when it comes to trying to project revenues going out in time.... then I figure 'em as losses, to be more conservative on what I just decided was my New Big Thing technique....

    Make sense?
     
  5. Handle123

    Handle123

    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.
     
  6. Overnight

    Overnight

    If your BE trade loses money after commish/fees/taxes, it is a loss. If it makes money after commish/fees/taxes, it is a win. That's how I look at it.

    Seems easy enough.
     
    eusdaiki likes this.
  7. Thank you all.

    I went back and include all breakeven trades as loss in the loss column. Now my win to loss ratio is more accurate cause commission is a loss.
     
  8. Overnight

    Overnight

    Commission should only be counted as a loss if your trade closed at a point where it's gain did not exceed your commish/fee/tax expense. Even if after all is said and done, you net $.20, $.10, even a penny, that is a gain. That is profit.

    Think about it.
     
  9. speedo

    speedo

    I track Wins, Losses and Scratches. The scratch trades give me feedback on target and initial stop and break even stop evaluation with respect to MFE and MAE. Commission is a variable cost of doing business and it reflects in my P&L, where it belongs.
     
    Crashed and algofy like this.
  10. Thanks speedo,

    So you don't include breakeven as a loss in your win to loss ratio, or expectancy?
     
    #10     Jan 21, 2017