Lets take a look at the Closed Trades stats from February to see how the system performed.
We know the overall stock market did well with the S&P 500 gaining 80 points with barely a minor dip during the month. It was a fairly active month for our system with a total of 51 trades.
As I’ve mentioned in the past here – and we talk about on the Live shows – the main goal in Swing Trading is to have more winners than losers – and for the winners to be bigger than the losers. This simple goal ensures that you will be successful over a long-term series of trades.
Here’s a look at the breakdown of winning trades versus stop-outs.
As you see on the chart above, out of the 51 trades 24% got stopped-out below the Trigger price and 76% hit the Trailing stop above the Trigger price.
Remember, our system is designed so that a trade only gets closed when it hits the Trailing Stop. A losing trade occurs when a stock either trades down to the Initial Stop-Loss or a raised-up Trailing stop which is still below the Trigger price.
The Average Percent Gain for Winning Trades was +10.6% while the Average Loss on Stop-Outs was only -2.5%
So the system achieved our goal – more winners than losers – and the winning trades were significantly larger then the losing trades. That is the simple key to success swing trading stocks.
Here’s a breakdown of each trade that shows the Minimum and Maximum gain. The Minimum Gain shows how each trade fared just using the system trailing stop. In real-life trading we look to take partial profits at the computed Targets and Parabolic stops.
That chart above provides a good visual look at how the average gain was much greater than the average loss.
The dark green bars are the Maximum distance the trade moved in our favor after triggering.
The light green bars show the Minimum distance the trade moved in our favor before it hit the “ratcheted-up” trailing stop.
51 trades over the course of the month seems like a reasonable data set for analysis, but we want to keep in mind that the overall stock market cooperated too.
To sum things up, the system did great last month and so far this year we’re extremely pleased with the performance.
As we’ve discussed on the shows, since everything is fully automated on the back-end and all aspects of these trades are based on our pre-programmed logic, the system itself kind of takes on a life of its own.
Considering that the stats we see above are just the second month since we went live, things are looking good. Two months in everything is running like a finely-tuned machine.