How IG's trade of the week strategy secured a 31.54% gain in 2024

​​​What is ‘Trade of the week’ and how to access it?

IG's ‘Trade of the Week’ (TOTW) is a concept by IG’s UK market analysts, Chris Beauchamp and Axel Rudolph. The goal is to show traders how to place trades and decide on stop-loss and limit orders, using sound money and risk management techniques.

All weekly TOTW setups are hypothetical and not traded with real money by IG’s analysts. These are recorded every Monday morning and are available on the IG UK website under ‘News and Trade Ideas’, on My Investors Group (MyIG) under ‘News’ and ‘Videos’, and on IG's YouTube channel.

​IG’s Trade of the week: why only risk 2% of capital per trade

In 2024, building from 2023’s +22.67% hypothetical gain, the TOTW achieved a +31.45% hypothetical gain. Context is crucial for understanding percentage gains and losses, as numbers alone can mislead. A 31% annual gain may seem impressive, but if a trader risks 10% per trade, future account wipeout is likely due to excessive risk.

At IG, no more than 2% of a A$19,000 demo account’s trading capital is risked per trade, with a 0.01% spread added. This limit is crucial because consecutive losing trades are bound to happen within a year, and it helps avoid significant drawdowns - how much an account is down from its peak before recovering.

2024 TOTW weekly setups chart

Analysing the 2024 statistics, monthly gains of about 11.5% in January and November compensated for the 8% drawdown. If 10% were risked per trade, the hypothetical drawdown would have been 40%, requiring a 67% gain to recover.

Achieving a hypothetical 31.45% gain in 2024

Despite a hypothetical 31% gain in 2024, only half of the trade setups were successful. Nine trades began positively but were stopped at breakeven as IG’s analysts move stop losses to breakeven once the market moves favourably. This creates risk-free trades, as the stop loss at entry prevents loss.

21 setups were profitable, and 20 were not, showing IG’s analysts were correct around half the time. Yet, they achieved a significant hypothetical 31% year-end gain.

Monthly profit and loss statistics and per trade return chart

Eight months ended positively, four marginally so, and four negatively. Each weekly trade had a larger average win than loss, resulting in a hypothetical 31% year-end gain despite being right only half the time.

The average monthly loss was -4.51% and the average monthly profit was +6.01%.

​2024 TOTW monthly return chart

The average gain per trade was £362.84 (A$689.39), and the average loss was £223.72 (A$425.07), a ratio of 1.62. The average winning trade was 1.62 times the average loss.

Balancing risk and reward

By maintaining discipline - limiting losses to no more than 2% per trade and achieving average gains 1.62 times larger on winning trades about half the time - a hypothetical 31.45% profit was realised in 2024.

Despite only predicting correctly about half the time, IG’s analysts demonstrated that with proper risk and money management, achieving a significant end-of-year profit is possible.

​2024 TOTW per trade return chart