Do you count breakeven as a win or loss?

[Karel]

Count it a winner or a loser, but don't ignore it. Breakeven scores influence your averages. If you want more winners at lower average, call it a winner, or else a loser.

Regards,

Karel

[sisterwin2]

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

Very good point here Webs... I do love the research part. If I was not doing this I would be sitting at a bar throwing back a beer and this would be a lost of money. So I chose to bring my beer home and drink during research time. My life is a bit boring at this time except for the trading part of it. I am hoping one of my trades will buy new batteries for my sailboat. Sure seems what can go wrong, will go wrong. Hope the saying it comes in threes holds true.

Happy trading all.

[Rob]

Average It In The Loss Column

I would say average it in the loss column for two reasons: (1) It'll make you feel better because it will lower the amount of the average loss. (2) It really is a loss because it took those investment dollars away from another position that could have profited you, whether the position was held for a week or five years.

[scifos]

Interesting responses.

Spike: You hit the nail on the head when you mentioned equity curves. If I put my 3 breakeven (yes, AFTER COMMISSION AND ALL OTHER COSTS) in the loss column then my curve looks great because it lowers the average loser quite a bit without affecting (IIC, is is Affect or Effect?) my winning percentage very much.

Rob: who'se to say that the money tied up in the breakeven trade would have been lost in a different trade? I suppose you could call it a loser because the invested capital could have been earning interest though.

[df21084]

Opportunity Cost

It's a loser simply due to opportunity cost, in my opinion.

[spikefader]

Interesting responses.

Spike: You hit the nail on the head when you mentioned equity curves. If I put my 3 breakeven (yes, AFTER COMMISSION AND ALL OTHER COSTS) in the loss column then my curve looks great because it lowers the average loser quite a bit without affecting (IIC, is is Affect or Effect?) my winning percentage very much.

Rob: who'se to say that the money tied up in the breakeven trade would have been lost in a different trade? I suppose you could call it a loser because the invested capital could have been earning interest though.

heh, ya, it probably doesn't matter a whole lot that you include it as a loss. Let's face it; there is very little difference between breakeven INCLUDING costs (i.e. tiny profit) and breakeven NOT INCLUDING costs (i.e. tiny loss). That being the case, then what's the harm to include it as a loss rather than a win....

[Karel]

I... Spike: You hit the nail on the head when you mentioned equity curves. If I put my 3 breakeven (yes, AFTER COMMISSION AND ALL OTHER COSTS) in the loss column then my curve looks great because it lowers the average loser quite a bit without affecting (IIC, is is Affect or Effect?) my winning percentage very much. ...

So, that makes it easy: put them with the losers and check the equity curves, and put them with the winners and check the equity curves again. Then check yourself: what would you need more, a little boost or a check? Then pick the equity curves you need and put the breakevens as desired.

Other option: split them over the winners and losers.

Regards,

Karel

[skiracer]

Why are most traders so interested in how well their percentage is doing or how high a number it is. The only thing that matters is how much of an increase the total number is over what you started with. You can rationalize the percentages anyway you want to but the bottom line is how much more or less money you have at the end. Percentages are for those who want to show everyone else how well they are doing. Money is for those who could care less about any of the other shit or telling anyone else how well they have done especially when they know they have skewed the numbers anyway they can to make them look better. So for whose benefit is it to rationalize the percentages. How about if you bet a sporting event and you lay 6 points with the favorite and you're putting up $110 to win $100. The game ends in a tie and you lose the $10 vig but the bet is a push. No win or loss. Just the commission to play. I don't see how you could count it as a win or loss unless counting it as a loss makes your loss percentages lower and if that rationalization makes you feel better then you're only deceiving yourself. But that's typical an human nature.

[spikefader]

Ski, you've lost the vig. So it's a loss.

Percentages make a difference for those interested in deeper analysis of their methods. It's ok to reflect on the numbers, but yes, it's smoke and daggers because percentages (or more specifically the need for high percentages) don't mean much. I can lose 10 times in a row and nail 1 pick that rockets and makes me a bunch of money. I've got 10% success rate and apparently a knuckleheaded trader.......and I'm still huge cuz I've restricted the losses and made 'em small while I've let the rocket shoot to the moon and make me a huge knucklehead.

It's only when I wanna do an equity curve or some other representation of my methods that average winner/average loser and probability of success is going to matter.

And if I'm going to do an equity curve, I want my formula to be accurate, as well as the numbers I put in, so I'm not just adjusting the numbers to make a pretty curve, but I'm getting the curve that represents my trading. So it does matter. Just not to all of us

[scifos]

Why are most traders so interested in how well their percentage is doing or how high a number it is. The only thing that matters is how much of an increase the total number is over what you started with. You can rationalize the percentages anyway you want to but the bottom line is how much more or less money you have at the end. Percentages are for those who want to show everyone else how well they are doing. Money is for those who could care less about any of the other shit or telling anyone else how well they have done especially when they know they have skewed the numbers anyway they can to make them look better. So for whose benefit is it to rationalize the percentages. How about if you bet a sporting event and you lay 6 points with the favorite and you're putting up $110 to win $100. The game ends in a tie and you lose the $10 vig but the bet is a push. No win or loss. Just the commission to play. I don't see how you could count it as a win or loss unless counting it as a loss makes your loss percentages lower and if that rationalization makes you feel better then you're only deceiving yourself. But that's typical an human nature.

I need a better way to compare my different paper portfolios than just the dollar amount.

[Rob]

Affect

. . . lowers the average loser quite a bit without affecting (IIC, is is Affect or Effect?) my winning percentage . . .

I'm not Doug, but I do know that "affect" would be correct. Affect is a verb; effect is a noun.

Rob: who'se to say that the money tied up in the breakeven trade would have been lost in a different trade? I suppose you could call it a loser because the invested capital could have been earning interest though.

My rationale is that the purpose of investing is to increase the value of the investment. So anything that falls short of that must be a loss.

[spikefader]

Interesting rationale Rob. Do you think that another purpose/goal of investing is to improve; i.e. become a great investor/trader in all markets.

If that's true, then to become great one must learn to see value in those trades that are executed to perfection but may lose you money ..... not just the trades that are closed for profit.

See, in my humble opinion, it's the trades that stop out even or for limited loss in a disciplined fashion that are great trades, and proof that one is doing well.......trading a plan to perfection. Sure, they made no money, but they are INCREASING your value as a trader/investor. Every loser is a winner in my book. It's more than just the money that matters. And if everyone could get that through their heads their trading would improve. But unfortunately, emotion gets in the way of all that.......as well as the perception that losses are bad and to be ashamed of and gains are good and to be boasted about.

[Rob]

Six Of One, Half-A-Dozen Of The Other

Do you think that another purpose/goal of investing is to improve; i.e. become a great investor/trader in all markets.

Sure, but in terms of dollars and cents, a "break-even" trade made you nothing, hence a loss, i.e. no gain for your investment. I understand there are points on both sides to be argued; I was simply stating my opinion on the way I would do it. So far, 10 of 18 in the poll agree that it goes in the loss column.

[spikefader]

Sure, but in terms of dollars and cents, a "break-even" trade made you nothing, hence a loss, i.e. no gain for your investment. I understand there are points on both sides to be argued; I was simply stating my opinion on the way I would do it. So far, 10 of 18 in the poll agree that it goes in the loss column.

Yup, majority is speaking for sure. But strictly speaking, a breakeven including commission (as in Sci's post) actually MAKES profit of the commission, so it's a gain. Anything else is kinda denying reality. I'll shut up now; I'm probably laboring my point. hehe

[skiracer]

Interesting rationale Rob. Do you think that another purpose/goal of investing is to improve; i.e. become a great investor/trader in all markets.

If that's true, then to become great one must learn to see value in those trades that are executed to perfection but may lose you money ..... not just the trades that are closed for profit.

See, in my humble opinion, it's the trades that stop out even or for limited loss in a disciplined fashion that are great trades, and proof that one is doing well.......trading a plan to perfection. Sure, they made no money, but they are INCREASING your value as a trader/investor. Every loser is a winner in my book. It's more than just the money that matters. And if everyone could get that through their heads their trading would improve. But unfortunately, emotion gets in the way of all that.......as well as the perception that losses are bad and to be ashamed of and gains are good and to be boasted about.

An I agree with you 110% on all of your post, especially the last statement. Most people I see trading are driven by making their gains the prominent factor and really don't consider the becoming a better trader as part of learning from the losses or breakevens and controlling the trade with a well disciplined plan and limiting the losses at a comfortable minimum for themselves. They are driven more by showing a higher percentage of gains anyway they can and thinking that's what makes them a better trader.