Even though each transaction only involved a 2% risk of capital, 50 Trades of the Week produced a notional return of +31.45%.
Review of 2024 trading statistics (partially transcripted video)
Welcome to this week’s “Trade of the Week” on Monday, December 23, 2024. I also wanted to review our statistics because we closed all of our positions last week. As you can see, we are up 31.5% so far this year, even though we are only risking 2% of our capital on each deal. We began with an account of £10,000.00 at the beginning of January, and you can see below the hypothetical returns on that account, which has now increased by £3,145.00.
As you can see, the monthly returns were 11.5% in January, for instance. Additionally, we saw gains of 11% in June and 12%, or 12.6%, in November. In July, we experienced our biggest dip of 6.3%. As you can see, July was the biggest of our four losing months, with a drawdown of 6.32%. And the monthly returns are shown here on the right-hand side. As you can see, the losing months are typically shorter than the winning ones. Accordingly, I believe that the average monthly loss was 4.5% and the average monthly win was +6%.
A thorough review of the statistics
If we look at the numbers, you can see all of the deals that we list each week right here. As you can see on the right, if they are green, it indicates that they are making money, or red, it indicates that they are losing money. The white ones are then simply stopped out at break even. Thus, these trades are neutral. As you can see, there were times when we experienced drawdowns of about 8%, such as in July of this year, when we had four trades in a week. For this reason, we only risk 2% of our trades since, if we lose, then lose again, and then lose again, after four consecutive losses, we would have lost 8% of our capital. However, we may return to break even with just a 9% profit. As I previously demonstrated, you can see that we made over 9% for three months.
However, since four trades of 10% is a 40% loss, if we had risked, say, 10% every trade, we would have needed to generate 67% profit to break even. That is why it is so crucial. As you can see, there were nine neutral trades, twenty winning trades, and twenty losing trades. Therefore, we are correct half of the time on average. How, then, can we bring right half the time and turn a 31% profit? As you can see from the profit distribution, all of our losses are limited to 2%. We let our profits run despite the extremely strict stop-loss control. Looking at “Trade of the weeks” reveals the secret.
This concludes our overview of 2024’s transaction of the week; we’ll examine it in greater detail the following week.