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Non-Tech : CYBERTRADER
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To: Dominick who wrote (1097)8/4/1998 12:09:00 PM
From: Dave  Read Replies (1) of 3216
 
Dominick:

thanks for your response. It must have been a little late for me last night because I wrote down 25 trades per week, when my spreadsheet clearly indicated 20 trades per week - this accounts for the primary difference in our calculations. I also made the assumption that I would not let my account grow beyond $100K, so I would not gain any additional buying power during the year. I would remove any excess from the account and consider it my paycheck/savings. I also made the assumption that the average stock price would be $50 and I would therefore never have more than 4 positions open at any one time. FYI I will list the 'Required Point Gain per Winner' for various winning trade percentages @20 round trip trades per week - using the same assumptions as in my previous message.

Winning % ---- Point Gain per Winner
---------------------------------------
30 ---------------- 1.02
40 ---------------- 0.71
50 ---------------- 0.51
60 ---------------- 0.39
70 ---------------- 0.30
80 ---------------- 0.23
90 ---------------- 0.17

It's pretty obvious that the as you approach the higher winning trade percentages that the job becomes fairly easy! It's also pretty obvious, but not shown, that commissions are a huge factor in your success, and any reduction in commissions would make the job a whole lot easier. And lastly, keeping your average loss to 0.25 points or less is critical. I'm assuming that if you are going to stay in the business of day trading that your winning trade percentage will need to average better than 50%. If you average less than 50%, then I think you would have a tough time consistently making the required point gains via intra-day trading. I would assume that you would need to switch your time scale to 2-5 days to consistently make the larger gains or go back to your day job! Basically I'm just trying to set some realistic goals and numbers as part of my plan before I start. Any other comments are definitely welcome.

Regards,

Dave
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