Tuesday, August 10, 2010
Return on Capital
I think that return on capital is the most important factor of any trading method/style/scheme.
And everything should be measured in percentages, as the actual dollars involved aren't important. This type of thinking allows me to trade large amounts exactly the same way as small amounts, without fear or nerves getting in the way!
This graph is a combined total of the three managed accounts I have at OANDA. I started this graph on October 15th, 2009, when I only had one account (with a few private clients), and since then I started the other two managed accounts (and these are open for anyone to join).
Because this is a combination of 3 accounts, note that not all monies is available to be committed to each trade, so there are 2 lines on the graph - the cumulative returns of the available bank, and the cumulative returns of the total bank.
The distance between the green squares indicates the number of trades I made in one of these accounts each week. This graph covers 1,142 trades, over 43 weeks. There have been some 'slow' trading periods - like the recent past - but overall I'm averaging nearly 7 trades per day.
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