Dave:
I'm not sure of your $1040 per week trading costs. 25 round trips @ $45 ea. = $1125 without connection charges.
Perhaps you could show me where Im going wrong here. Here's how I figure it:
A 40% return on $200K = $80K per year.
25 round trips/week x 50 wks.=1250 total round trips per year.
55% winners of 1250 = 687.5 x $440,(.44 winning gain per trade), = $302,500.
45% losers of 1250 = 562.5 x $250 loss = $140,625
$302,500 - $140,625 = $161,875 gain. divided by $200,000 buying power = 81% return. This ignores your buying power increasing during the year due to winning trades.
Expenses:
25 round trips per week x 50 weeks = 1250 r.trips per year x $45 per round trip = $56,250. $161,875,(gain)-$56,250 = $105,625. Divided by $200,000 buying power = 52.8% return.
I have not included connection charges to the above. But, I guess my point is: It appears you have to make an 81% return on your $200k buying power,($161,875), to subtract at least 50% in expenses to make a 40% return,($80k), on your $200k.
What would happen if 50% of your trades were winners?
Perhaps you could guide me. How far off are my calculations?
Dominick |
