Do you count breakeven as a win or loss?

[scifos]

I'm trying to compute some statistics for a portfolio of mine and have a common problem. I'm calculating the average winner, average loser, and counting the number of winners and losers, but don't know if I should count a breakeven trade (breakeven AFTER factoring in commission) as a win or loss? My gut says I should call it a loss, since I would have spent time on the trade and gotten nothing out of it.

[mrmarket]

I'm trying to compute some statistics for a portfolio of mine and have a common problem. I'm calculating the average winner, average loser, and counting the number of winners and losers, but don't know if I should count a breakeven trade (breakeven AFTER factoring in commission) as a win or loss? My gut says I should call it a loss, since I would have spent time on the trade and gotten nothing out of it.

Generally I compare my trades to the return on the S&P 500, thus comparing the return of the S&P vs. the return on my trade over identical time periods.

I'm being a little tough on myself by doing this since the average PE of my holdings is usually lower than that of the S&P 500....doesn't matter though since my trades almost always outperform the market. I am HUGE!

[IIC]

I ignore it...That's why the have A/D/U...Advanced, Declined, Unchanged...But it is pretty rare that I have Exactly broken even including commissions...because I get these little fees sometimes on commissions like 1 cent 4 cents 9 cents etc...IIC

[Lyehopper]

Sounds like you're getting technical Sci.... So "technically" I would call a break even trade a loss because it cost you $ to make the trade..... Unless (of course) you did factor in the commission cost and mathematically broke EXACLY even.... THEN it cost you some time right?.... and "time is money" so you still lost on the transaction....

[skiracer]

I don't count the breakeven position as a trade in the numerical averaging part of the total trades but I do factor in the commission both ways as part of the expense of doing trading. The push is a moot thing as it doesn't effect the gains or loss totals thus my rational for not counting it in the averaging. But the commission is a real expense. I always total up the gains or losses and then subtract the commissions from the gains or add them to the loss totals to get my final number for a gain or loss total. Divide that by the total trades and that's the number and the reallity for the percentage of gain or loss.

[scifos]

Sounds like you're getting technical Sci.... So "technically" I would call a break even trade a loss because it cost you $ to make the trade..... Unless (of course) you did factor in the commission cost and mathematically broke EXACLY even.... THEN it cost you some time right?.... and "time is money" so you still lost on the transaction....

I agree, even when after commissions there is no money gained or lost, you've lost time and effort.

[Websman]

I agree, even when after commissions there is no money gained or lost, you've lost time and effort.

I don't count time invested, since I get a lot of enjoyment out of trading.

[sisterwin2]

I only "broke even" a few times.... When I am selling without a gain it is normally because I was not going to make money and I was lucky to break even. I can only remember two and I felt lucky that I had the opportunity to break even.... I feel like it is a lost since I spent time and energy with the research. I always include the expense of trading.

[Runner]

I call it a scratch and sorry folks the market does not pay you for your time spent researching your stock. You only get paid when you sell and at what point you sell. Once the trigger is pulled your sell point is the only thing you truly have control over.
(-overnight gaps)

[spikefader]

Interesting question.

The way I look at it is if you close the trade right at breakeven at your entry price you've lost no investment capital, but you have lost money on commission. So it is a real loss to you.

If you manage it so that it is a breakeven inclusive of commission, then one might be tempted to call this a breakeven and not worth including in the percentages. But strictly and technically speaking, you've made profit to cover expenses and it is a win.....just not a very profitable one.

It's actually a very important question, and goes to the heart of accurate analysis and accurate equity curve estimations.

[spikefader]

By the way, I voted incorrectly. I chose 2 and should have chosen 1...

[IIC]

I'm trying to compute some statistics for a portfolio of mine and have a common problem. I'm calculating the average winner, average loser, and counting the number of winners and losers, but don't know if I should count a breakeven trade (breakeven AFTER factoring in commission) as a win or loss? My gut says I should call it a loss, since I would have spent time on the trade and gotten nothing out of it.

I don't think very many people actually read the original post.

[Lyehopper]

I don't count time invested, since I get a lot of enjoyment out of trading.

You'd make a great employee.... If you ever are in need of a career change please call me, I have a nice salaried position for you.... Be prepared to really enjoy the job.... and I'll even let you work weekends!

[IIC]

You'd make a great employee.... If you ever are in need of a career change please call me, I have a nice salaried position for you.... Be prepared to really enjoy the job.... and I'll even let you work weekends!

Have a position for me?...I'll teach your cows Canslim on the weekends...As far as I'm concerned everyday ends in "y"...So what's the difference???...Monday, Tuesday...Today, Yesterday, Everyday...Well, I guess there is one that doesn't...Tomorrow...IIC

[Websman]

You'd make a great employee.... If you ever are in need of a career change please call me, I have a nice salaried position for you.... Be prepared to really enjoy the job.... and I'll even let you work weekends!

You pay half a million and I'll work 7 days a week, for at least a year.