....would you mind giving a rough estimate of how many trades you make per year and a ballpark profile of your long term win / loss / scratch ratio?
Also, would you say that you see a small number of trades making up for the bulk of your gains (5% of trades accounting for +40% of profits etc), or are you more evenly distributed? Speaking in terms of additions as pyramids on a single trade rather than separate ones.
These are questions I wish I had the answer to when I started, just to give me an idea of what a person could expect to accomplish if they were to succeed as a trader. I have some of the answers below. Unfortunately, they will be of limited value to anyone who does not or will not wish to trade like me.
My actual trades (not contracts) taken per year are around 2,000. These are a combination of my (about 200) long term (absolutely-have-to-be-in-this-market for the possible big move it could make) mechanical trades and my 1,500 - 1,800 mostly mechanical short-term trades (with judgement overtones) placed in the markets which I'm already in and are continuing trends. Some (about 20%) of the shorter term trades become longer term trades by the process mentioned in an earlier post. About a 10% of the "adds" turn into outliers ("ten-baggers") which really help the bottom line in a year like last year. Some years the additional trades don't add a tremendous amount of value--then again, they don't cost the bottom line at all--just take some additional time and effort. On exceptional trending years, the additional trades can make the year a virtual bonanza, a great time to retire if that is your wish.
Over my trading sample of the last ten years, the bulk of my profits (at least 85%) are made from positions created by 3% or less of the trades I've taken in the year. Because my variance is so great from size of winner to average loser, last year I averaged $78.50/contract traded after commissions/slip. For me this was fine. This is also why trading tens of thousands of contracts/year is necessary for my style of trading.
This is not the case of all successful traders. Some have to trade even more (or less) because of the nature of their edge.
One of the most successful short term traders I've ever had the pleasure to know averages $5 - $8 a contract traded after commissions/fees. He wins on 45% of his trades (profiting about $100) and loses (about $50-$60) 55% of the time. His outlier trades are only 2 - 3 times as large as either his wins or losses. He trades many thousands of contracts a week
If there is anything I have learned by trading and being surrounded by traders is that every successful trader has a different optimum frequency of trade and personal yield tolerance.
With effort a trader can change his tolerance for risk to be greater or smaller. Usually he adjusts this tolerance to be a more conservative one after he has proven that he can be relatively sure of continued success.
The sooner a trader becomes secure in his
method of trading the sooner he can get on with the important business of using the results to build his business.