Trade of the week: hypothetical +31.45% return in 2024
Despite only risking 2% of capital per trade, IG's 50 Trades of the week achieved a hypothetical return of +31.45%.
2024's trading stats in review
(Partial video transcript)
Axel Rudolph: Hello and welcome to this "Trade of the week" on Monday the 23rd of December 2024. And since we've closed down all our positions last week, what I wanted to go through is our stats. And you can see here that we are up 31.5% nearly year to date, whilst risking only 2% of capital per trade. And you can see here the hypothetical returns on an account of £10,000.00 we started off with at the beginning of January, which has now risen by £3,145.00 hypothetically.
And you can see that the monthly returns, for example, in January were 11.5%. We also had an 11% gain back in June and a 12% or 12.6% gain in November. And our largest drawdown was 6.3% in July. So you can see here we had four losing months of which July was the largest one with a drawdown of 6.32%. And you can see on the right hand side here the returns per month. And you can see that on average the losing months are smaller than the winning months. So I think the average loss per month is 4.5% and the average winner per month was plus 6%.
A closer look at the numbers
So if we delve into the numbers, you can see here all the trades which we've listed every single week. And you can see here on the right hand side, whether they're green - that means in profit - or red - that means they are losing money. And then the ones which are white are just stopped out at break even. So these are neutral trades. And you can see we had some drawdowns of around 8% where we had four consecutive trades in a week; for example, in July of this year. And this is why we only risk 2% of trade because when we make a loss, and then we make another loss, and another loss, and another loss of four losses in a row, risking 2% of capital, we will have lost 8%. But we only need 9% profit to get back to break even. And you can see here, as I showed you before, we have three months where we made more than 9%.
But had we risked, for example, 10% per trade, we would have had to make 67% profit to get back to break even because four trades of 10% is a 40% loss. So that's really important. And you can see here, nine trades were neutral, winning trades 21, losing trades 20. So on average, we're right half of the time. So how do we make 31% profit by bringing right half of the time? Well, basically, if you look at the profit distribution here, you can see all our losses are capped at 2%. So very rigorous stop loss management, yet we let our profits run. And that is the secret when you look at "Trade of the weeks".
So this is the summary for 2024 with regards to trade of the week and next week we'll look at it in even more detail.
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