Understanding The Output
You may find your trade ideas from a wide variety of sources: market "experts", talking heads on TV, friends, the news, technical indicators, etc; but you probably have a specific style when it comes time to sell. You may be a "buy and hold" investor, or you may set certain price targets, or you may need capital gains tax treatment, etc. Our Time Machine lets you look back at any source of trade ideas and see if you would have made money by trading on those ideas.
Strategy Comparison
The Strategy Comparison allows you to compare how different sale strategies would have done. Perhaps you should listen to Jim Cramer for your "buy and hold" retirement portfolio, and your buddy in the next cubicle for your short term trading portfolio. Maybe you would have done much better if you had sold if you were up 5% or down 25% in any position instead of holding out for capital gains tax rates. We make it easy to see whether you should ever listen to a given source, or whether you could improve your profits by changing the way you sell.
The Comparison Graph shows the Cumulative Profit of each strategy from the date of the first trade until today. The color of each line in the graph matches the color that the strategy is displayed in in the chart. The higher the line for a given strategy is at the right side of the graph, the more profitable that strategy might have been.
Default Strategies:
| Base Case: |
sell each stock on the day you entered as the unwind date |
| 5% Loss / 25% Gain: |
sell each stock the day after it closed either down 5% or up 25% from the purchase price |
| Sell After One Year: |
sell each stock one year after you purchased it, perhaps to receive capital gains tax treatment |
| Never Sell: |
never sell any stocks that you purchased (i.e. buy-and-hold) |
The strategy that currently is being shown in the Transaction List and other graphs is highlighted . To select a different strategy, click on its name.
Strategy Statistics:
The table of statistics helps you see how profitable or unprofitable each strategy might have been. If the average profit was positive, the statistics appear in the winning color and if it was negative, the statistics appear in the losing color
| #Win / #Lose: |
the number of profitable trades (Winners) and unprofitable trades (Losers) |
| Win%: |
the ratio of profitable trades over the total number of trades |
| Avg. Profit: |
the average profit, net of fees, per trade as a percentage of the amount invested |
| Avg. Yield: |
the average annualized yield, net of fees, per trade. The yield for a single trade is equal to the profit of the trade extrapolated over a year (i.e. = profit % * (365 / # days held). The Avg. Yield is the average of the yields of each trade weighted by the amount invested and the number of days held |
Transaction List
The Transaction List allows you to see the details of each trade. Profitable trades appear in the winning color and unprofitable trades appear in the losing color. The strategy that currently is being shown in the Transaction List is displayed and highlighted.
Profit Graph:
The Profit graph displays the cumulative profit of the selected strategy from the date of the first trade until today. It is the same as the series displayed in the comparison graph, without the distraction of other strategies
# Winners & Losers / quarter Graph:
This graph lets you see by quarter how many profitable and unprofitable trades you would have purchased during the period. You can see if there were periods of time when your picks did well, as well as periods of time when they may have done poorly. Maybe select more winners than losers during times of increasing oil prices. Or maybe you do particularly well in fourth quarters. This graph will help you figure it out.
After Unwind Graph:
This graph may look odd at first, but it helps you answer the critical question of whether you sell too early. This patent-pending analysis allows you to see what happens to your profitable and unprofitable trades after you sell. Each line in the graph represents a single line of the Transaction List. Profitable trades are in the winner color and unprofitable trades are in the loser color. The horizontal axis is the number of trading days after you sold the stock (i.e. the Unwind Date) and the vertical asset is the percentage the price moved since you sold the stock.
If, for example, all of the red lines sloped upwards, you might consider you've been selling your stocks too early because losing trades have been going up after you've sold.
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