“2 Baskets” System 2018 Results
Before I begin, I would like to remind all that I trade with 50:1 leverage. So if I had a win of 2%, it would be 4% for someone trading with 100:1 leverage and 8% for someone with 200:1 leverage. Similarly, a 10% loss would be magnified for higher leverage.
· During 2018, weekly trades were taken in 49 weeks.
· Result were 38 wins, 7 losses, 4 break even.
· In 27 weeks, Basket 2 did not trigger
· In 22 weeks, Basket 2 did trigger.
· The average winning week was 2.2%.
· The average losing week was 4.2%.
· The net profit for the year was 55% of account value.
Weeks With One Basket Only
First, let’s analyze the 27 weeks in which only one basket opened. The result for these weeks was 27 winners, 100% winners! Since Basket 2 was not triggered, it means that Basket 1 never took a big drawdown. Then it is just up to picking the right moment to exit the basket in profit.
There is a downside to these great results. Basket 1 could not trade with all of the available funds in the account. Funds need to remain available in case Basket 2 is triggered. And since Basket 2 uses 50% larger position size than Basket 1, then the funds left in reserve for Basket 2 are larger than the funds used for Basket 1. For example, if one trades with a $1,000 account, then only $400 of the available margin can be used for Basket 1, because if Basket 2 is triggered, it will require $600 margin. Therefore, Basket 1 must be traded with only 40% of the available funds.
So for 2018, the average win for weeks with one basket only was 5.2% of funds used. But since only 40% of the available funds were used, then the average win was 5.2% x 40% = 2.1% of account value. For the year, the profit was 56% of account value. The profit would have been 140% if the full account value could have been used on these trades. But one cannot use the full account value since it cannot be predicted which weeks will not trigger Basket 2.
Weeks With Two Baskets
For the 22 weeks in which Basket 2 was triggered, the record was 11 wins, 7 losses, and 4 break even. The total for the year was a loss of -1.5% for the year, or nearly break even. Almost all of the Basket 1 were closed at a loss, while almost all of the Basket 2 were closed with a profit. The net result was that the combined losses for Basket 1 were almost the same as the combined profit for Basket 2, resulting in break even for the year.
If it had been possible to trade only Basket 2 from the 2 basket weeks, the profit would have been 70% for the year. This assumes that the entire account value was used in the Basket 2 trade.
The following post will discuss the conclusions from the results.
Before I begin, I would like to remind all that I trade with 50:1 leverage. So if I had a win of 2%, it would be 4% for someone trading with 100:1 leverage and 8% for someone with 200:1 leverage. Similarly, a 10% loss would be magnified for higher leverage.
· During 2018, weekly trades were taken in 49 weeks.
· Result were 38 wins, 7 losses, 4 break even.
· In 27 weeks, Basket 2 did not trigger
· In 22 weeks, Basket 2 did trigger.
· The average winning week was 2.2%.
· The average losing week was 4.2%.
· The net profit for the year was 55% of account value.
Weeks With One Basket Only
First, let’s analyze the 27 weeks in which only one basket opened. The result for these weeks was 27 winners, 100% winners! Since Basket 2 was not triggered, it means that Basket 1 never took a big drawdown. Then it is just up to picking the right moment to exit the basket in profit.
There is a downside to these great results. Basket 1 could not trade with all of the available funds in the account. Funds need to remain available in case Basket 2 is triggered. And since Basket 2 uses 50% larger position size than Basket 1, then the funds left in reserve for Basket 2 are larger than the funds used for Basket 1. For example, if one trades with a $1,000 account, then only $400 of the available margin can be used for Basket 1, because if Basket 2 is triggered, it will require $600 margin. Therefore, Basket 1 must be traded with only 40% of the available funds.
So for 2018, the average win for weeks with one basket only was 5.2% of funds used. But since only 40% of the available funds were used, then the average win was 5.2% x 40% = 2.1% of account value. For the year, the profit was 56% of account value. The profit would have been 140% if the full account value could have been used on these trades. But one cannot use the full account value since it cannot be predicted which weeks will not trigger Basket 2.
Weeks With Two Baskets
For the 22 weeks in which Basket 2 was triggered, the record was 11 wins, 7 losses, and 4 break even. The total for the year was a loss of -1.5% for the year, or nearly break even. Almost all of the Basket 1 were closed at a loss, while almost all of the Basket 2 were closed with a profit. The net result was that the combined losses for Basket 1 were almost the same as the combined profit for Basket 2, resulting in break even for the year.
If it had been possible to trade only Basket 2 from the 2 basket weeks, the profit would have been 70% for the year. This assumes that the entire account value was used in the Basket 2 trade.
The following post will discuss the conclusions from the results.
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