Another fresh start?

When I started my daytrading I started with around $6700 in an account and I almost doubled that in 2 months using a few ideas about money management that were more than a little off. Basically I may have lucked out in that those two months were very good months as a lot of the trades were winners and a lot were largish winners at that, I recall one that was over $3.00 per contract, that was a very good day.

Average trade per contract profits have been declining after a nice bump in May. These numbers reflect losing trades as well.

April = $0.20

May = $ 0.33

June = $ 0.11

July = $ 0.10

August = $ 0.06

This causes me some concern as my break even on some trades is as high as 8 cents on a small 2 contract trade... having said that a 2 contract trade is usually a more expensive price like $3.40 trade today. On this sort of trade even a 10% gain is 34cents so it is not as bad as it sounds. A 50 cent trade would be maybe 15 contracts and the breakeven would be 2.4 cents.

The long and short is that money management is more critical when trading smaller average gains as a large loss will wipe out profits that might take many trades to overcome instead of just a few. Of about 38 trades this month there have been 10 losers which is a 73% win rate, not bad.

April = 75.6%

May = 78%

June = 85.9%

July = 78..8%

August = 73%

This goes to show me that a large win rate is not the only thing needed to stay ahead of the game in trading. If I were running my own trades I would have stopped out of more than a few of the losers to keep losses from getting ahead of me as most of the larger losing trades, if not all of them, had to do with swing trading a day trade.

Seeing as we are not currently swing trading anything and will likely be advised prior to a trade being entered that it will be a swing I feel confident that I can manage those trades better. If we do enter a swing I have some rules to look after stop losses and complete exits. I figure that, seeing as the swings were the biggest losers, even if some of them won big as well, they are best to not enter at all, generally speaking, or at least entering with a smaller profit target and stop loss assigned.

Jeff.