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Strategies & Market Trends : Ask Vendit Off-Topic Questions -- Ignore unavailable to you. Want to Upgrade?

To: Vendit™ who wrote (5436)	2/26/2005 10:56:43 PM
From: Walkingshadow	Read Replies (1) \| Respond to of 8752

Hi Reid, I checked the results for the week. During this time, QQQQ advanced 1.6%, beginning the week at $37.03, and closing the week at $37.62. Since the list was posted after the market close on Friday, the data below assume that one bought or shorted the position at the opening price on the next trading session (Tuesday), and closed the position at the end of the trading session on Friday. =========================== LONG POSITIONS: BEAS: + 2.8% CNX: + 8.9% OVNT: + 3.3% CHKP: - 1.7% INTC: + 1.8% AH: +0.8% =========================== SHORT POSITIONS: XMSR: + 10.8% MDCC: - 0.2% ERES: - 0.6% BWNG: - 3.9% URBN: + 2.6% AYE: - 2.5% RHA: + 2.7% SCH: - 1.3% WM: - 1.5% LU: + 2.2% EP: + 3.1% =========================== SUMMARY: =========================== Long positions (n = 6): 5 wins, 1 loss; batting average 83%. Overall profit/loss: 2.7% (i.e., if you bought equal amounts of each). Average gain for winners: 3.5%; average loss for losers: 1.7% Short positions (n = 11): 6 wins, 5 losses; batting average 55%. Overall profit/loss: 1.7%. Average gain for winners: 6.2%; average loss for losers: 1.2% CONCLUSION: Long positions did better than short positions during this week, which was one of only two weeks this year when QQQQ advanced. Trades that bet against the trend for the week did not do well (55%). However, this is a bit misleading, since the risk was clearly blunted on the downside and enhanced on the upside: the magnitude of profit on winning trades overall (long and shorts combined) was 3.9%; in contrast, the magnitude of loss on the losing trades was only a third as much, or 1.3%. So, if you invested equal dollar amounts in all long and short positions, your average profit would have been 3.9% on the winners, but your average loss on the losers was only 1.3%. Overall, investing equal dollar amounts into all positions would have yielded a net profit of 2.7% for the week, or about 65% better than the index (QQQQ), which only advanced 1.6% on the week. Some may think 2.7% a week is not much. But compounded, if you can achieve 2.7% profit for 52 weeks in a row, you will quadruple your intial investment, and you will far outperform any mutual fund or index in any market in the world. T