bjesse a Big Wave Trading subscriber did an independent study of Josh Hayes’ trading performance. bjesse did not receive compensation for this review, but it highlights cutting your losses and riding your winners. Did you have this type of success? If you haven’t, why haven’t you subscribed to Big Wave Trading yet?
Looking at the performance of Josh Hayes’ trades in a scatterplot, it is clear that losses are kept small relative to gains. But exactly how are they distributed? Here I examine Josh’s trades from 1/1/2010 through 1/19/2011. There are a total of 697 trades. 61% are gains. The average gain is 33% and the average loss -6%.
The histogram shows a decidedly skewed distribution with a fat positive tail. It is non-normal; not a Bell curve. This is most dramatically seen in the log plot. This gives Josh his edge. Negative returns are confined to 4 bins; positive returns extend for more than 15 bins (nearly 5 are below the mean and over 14 above). 84% of losses are less than -10%. Nearly half of all gains are over 20%; one fifth are over 50%, and 7% are more than 100%.
Successful trend traders have positively skewed performance distributions; see Michael Covel’s excellent book “Trend Following,” 2009. Josh decidedly falls into that camp. At the risk of making it sound easy, this data once again shows that Josh’s success has three keys:
1) pick a high percentage of winners (61%),
2) keep losses small (3/4 are less than -8%), and
3) let winners run (half are over 20%, one fifth are over 50%).
Caveat: this data examines Josh’s performance based on reported percentage gain/loss per trade. It is not based on actual dollars invested. The results shown here would represent actual dollar performance only if an equal amount were invested in each trade.
There is no holy grail to investing and over the LONG run success doesn’t come from those who buy penny stocks. You will often see outrageous trade profiles where someone has “figured out the market.” It is absolutely hog wash, real results are proven here by one of our members bjesse. We aren’t here to give you stock market tips, tips are for waiters. Big Wave Trading gives you the tools to become a great trader.
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Great overview, thanks! To make it complete you certainly have to add average holding time.
Ivan,
I don’t track that specifically for Josh’s portfolio. However, based on other stats I keep I would estimate that Josh’s current average holding time is in the neighborhood of 65 to 85 days. Ballpark.
Hi,
could bjesse post the excel spreadsheet of buys and sells
related to these charts ?
John
I’ll ask.
John,
All of Josh’s buys and sells are posted on his website, available to subscribers. That’s where I get the data.
I was asked by other BWT subscribers for this spreadsheet so they could use it for their own trading. I put together an Excel 2007 version that can be used to track one’s own portfolio, both gain/loss dollars and percentages. I made it available gratis to BWT last year. They are free to distribute as they see fit.
Hi Mark,
I am new member jn126 since 1-27-11.
I have seen the 36 pages of Jashua’s
“Stocks I am selling, covering, watching
or studying”.
You put lots of work into the spreadsheet and
charts and now I want to duplicate it.
I was just hoping to save myself
20-30 hours of work.
John jn126@yahoo.com
I think BJesse will be able to post it for you on the forums. 🙂
Hi John,
Welcome aboard.
You’re right, there’s a lot of hours in that spreadsheet which you can avoid. I emailed my spreadsheet to Marketspeculator (aka BigWave_Trader) – you can get a it from him. Send him a PM or email. You can find him on this thread: http://www.bigwavetrading.com/stock-forum/viewtopic.php?f=3&t=226 You might also want to ask him for the version I put together last year which has documentation and other capabilities. PM me if you need help.
Mark
bjesse
Hi Mark,
I sent email to Josh as you suggested.
I also noticed that on page to post new message
the lower section has “Upload attachment” where you can attach
file (like attachment to email). I did not test if it is functional.
Another way, you could email me the spreadsheet as attachment.
My email is jn126@yahoo.com
Thanks in advance John
Hi John,
I sent you the spreadsheet, did you not get it?
Hi John,
I’ve tried the “Upload attachment” in the past; seems it only works for message content, such as pictures.
Anyway, sounds like you should have it.
Hi Josh,
I apologize, I missed it the first time and
now I found it. With Microsoft program
I converted xlsx into xls.
I am still writing here instead of forum
because I have a login problem.
The site shows me logged in on homepage
and forum homepage but I get:
“You do not have the required permissions …..”
when I try to enter areas like New Subscribers,
General Discussion or Login Problems.
Thank You Mark
Thank You Joshua
John
I am forwarding this message to Bob. My sincerest apologies.
Thank you for every other fantastic post. Where else may just anybody get that type of info in
such a perfect means of writing? I’ve a presentation next week, and I am on the look for such information.