(Updated at bottom - 22 December 2010)
The eagle-eyed amongst you will have seen that the annualised percentage returns (as shown on the home page) have dropped sharply from over 1,000% to around a 'mere' 750%. This is not as a result of a dramatic down day in the portfolio, but as a result of how the annualised figure is calculated.
The trading frequency in the projections is based on the historical average number of weeks for the trades listed in the log. Due to some of the open trades having been in place for quite a while now, it so happens that today, the average trade length calculation increased from 4 weeks to 5 weeks. This therefore reduces the calculated trading frequency going forward, as well as the projected returns.
Partly this is explained by the (relative) small number of trades still recorded in the log, but also possibly due to fall in trading activity (and therefore potential trading opportunities) in the run up to the holiday period. In my own account, I am actually under-invested at the moment, with cash waiting to be utilised, and therefore I am sitting waiting for suitable trades to present themselves.
It's quite possible that, if I open a couple of new trades in the remainder of this week, the average trade length may again drop to 4 weeks. However, I am only interested in opening those trades that satisfy my criteria (as defined in my ebook, 'The Trading Triangle'), of which none have appealed this week so far.
Update: I opened a new position today, which as mentioned above has reverted the average number of weeks per trade back down to 4, resulting in the the aniticipated effect on the annualised return. This may oscillate between an average trade length of 4 or 5 weeks per trade for a while.
No comments:
Post a Comment