First, thank you all for subscribing to the Newsletter. I hope each of you and your families have a wonderful 2008.
Now that 2007 has passed into history, it is time for me to review my performance in my subscription service trades. Trend Trader had a very good year. I closed 35 trades during the year and 94% were winners (33 out of 35). In fact, I have closed 26 straight winners that have an average gain of $1.19 a share. Including the 2 losers, the average gain per share for closed trades worked out to 95 cents a share. I was in 2 trades for over 4 months, but held the remaining 33 trades for an average of 12 days each. Factoring in the longer trades, the average time in trade increased to only 20 days. I still had a couple open positions in Trend Trader at year end. One is down substantially after a gap down, but I am writing covered calls on it to reduce the loss and bring in monthly income. I could have used it for a tax loss in '07, but I know I have a large long term capital gain in 2008 and will use the position to take a loss against that gain if the stock does not turn profitable. The other position I entered some time ago to produce regular income and it has performed quite well in that regard, returning almost 10% per year on my original investment. I began Trend Trader in March of 2006 and it has had 84% winners since inception.
Option Trader is my oldest service. It began in 2004 and has had 70% winners since then. In 2007, Option Trader enjoyed 68% winners in the 34 trades I closed. The average trade excluding only one longer trade (106 days) was 15 days. The size of investment in my Option Trader trades is generally less than in the Trend Trader trades where I am actually buying stock. Risk is ordinarily limited in the option trades as well through strategies such as spreads or condors though I do also make straight directional trades too. At the end of 2007, I had 5 open plays, one of which looks like it could provide substantial profit at January expiration and the others are spreads. Two of the spreads expire in January and look like they should wind up with relatively small gains or losses. The other two have quite a lot of time to expiration and permit me to adjust as conditions suggest. The winning trades averaged a gain of 86 cents a share and I did enjoy an overall gain in my Option Trader trades again this year.
In 2007, I closed 28 trades in the $10 Trader. I did suffer a dip from last year in terms of winning percentage when I achieved 64% winners this year. Overall, the winning percentage on these cheaper stocks since I began the $10 service in April of '06 is 75%. The average cost per share in 2007 was $6.20. I was in the average trade for 2 weeks and, including losses, averaged a gain of about 1% on each 2 week trade. I must confess, I did have a more difficult time with these cheaper stocks as a result of market conditions including high volatility in 2007.
When I look back, I certainly can't complain when my worst performing service had 64% winners and my best hit 94% winners.
I truly enjoy writing the Newsletter articles and appreciate the bloggers and emails. I try to answer each communication personally and will continue to do so as long as time permits and the writers recognize I cannot and do not give personal investment advice. I do have one favor to ask of those very few who complain about the articles or portions thereof in the blog and emails. Though I don't mind the complaints, I would ask that those few complainers refrain from talking about how much they pay for the Newsletter since they get it for FREE!
by Bill Kraft, Editor
Copyright 2008, Makin' Hay, Inc.
All Rights Reserved
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Technorati tags: stock trading stock market investing trend trading swing trading option trading stock options stock option trading Bill Kraft
To comment on Bill's article click on the "comments" link below.
Bill..your win rate %performance is impressive and I am interested in your service.. I would like to see what your projected equity curves look like but need some additional information to do that.
Could you please post or reply with your win/loss ratio for each the 3 systems you mention. It cant be determined from the info you have given. Thanks
Bill, I was thinking of trying your Option Trader Service . I have stock trading experience but know very little about options. Will your service teach me what I need to know?
Thanks for writing, CG. I believe you can find the information you seek in the Trade Tables which have complete information on the individual trades.
Dear E F,
My Option Service sends alerts on trades I personally enter with only rare exception. Watching those trades can certainly help with your education, but I don't think it is enough alone to teach you what you need to know. I would suggest you get my new book, "Trade Your Way to Wealth: Earn Large Profits on No-Risk, Low-Risk, and Measured Risk Strategies," which is available at amazon.com on pre-release. The publisher has advised me that the book will be released on January 18th. It would also be helpful to read Lawrence McMillan's "Options as a Strategic Investment" and some book on technical analysis such as Martin Pring's "Technical Analysis Explained." I would also suggest you go through the MarketFN archives and read my earlier articles, particularly those on business plan, money management, and exits then practice, practice, practice. Thanks for writing and have a great new year.
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