MTG Historical Trade Performance
Unlike most stock picking services, we have been tracking and publishing the results of every stock & ETF pick in our newsletters since our company's inception in 2002. During this period, each of our daily newsletters have generated a Fully Invested Annualized Return of approximately 56%. Play the 2-minute video below to learn how to earn a Fully Invested Return with our services, then click the links below the video to view actual historical trade performance of our model trading accounts:
How performance is calculated:
In addition to providing specific entry and exit points for all trade picks, we also provide exact share sizing based on a model trading account. This provides our members with an actual portfolio management service that can be replicated, rather than just "stock picks." Here is how it works...
- Explanation of our model portfolio -
The number of shares listed for each trade is based on a
model account value of $50,000 ($100,000 total buying power with standard brokerage margin). This is a fixed model account value that stays the same from day to day (does not increase based on cumulative gains). Based
on the model account value of $50,000 cash, we predetermine and provide the exact position size of each stock and ETF trade by assuming a maximum capital risk of approximately 1% per trade ($500). If, for example, we enter a new trade
that requires a 2-point stop loss, the maximum position size would be limited to
250 shares ($500 max risk / 2 points = 250 shares). Depending on market conditions, we sometimes risk less than 1% ($500) per trade.
Position size for each trade is always reported to members ahead of time so that they may easily determine
their own position size, based on the actual size of their individual trading accounts. For example, a member with a $25,000 account should theoretically be able to mirror the percentage of our returns simply by sizing all his trades at 50% of our listed share size for each trade. Conversely, a member with a cash account value of $100,000 could simply double our share size for every trade.
As explained in the video above, we are conservative in our actual trading with real money. First, we risk only 1% of account value for each trade. Depending on one's own risk tolerance, a member could simply risk 2% of account value per trade and still be within generally accepted rules of risk management. Furthermore, we typically use only about 25% of the account's total marginable buying power of $100,000 (on average). As such, a member would usually be able to double, triple, or even quadruple our share size in order to proportionately increase their returns, relative to our actual reported performance results. Of course, risk works both ways, so a member taking larger share size must be willing and able to handle larger profit/loss swings in both directions.
Above all, we firmly believe
in maintaining the same maximum capital risk for each and every trade, regardless
of how good any individual trade setup may appear. Traders who "swing for the fences" on any
one particular trade can not be successful in the long-term. Rather, consistently profitable
traders are successful because they continually work a small mathematical edge on
a large number of trades. Realizing a gain of several percent each month is much
better than making 25% one month, but losing 25% (or more) the following month. This conservative approach
is the reason we have been consistently profitable and have outperformed the main stock market indexes by a wide margin since 2002.
Commission fees - In order to accurately simulate
a real trading account, brokerage commission fees are automatically factored in
to all trade results. While commission fees vary greatly from one broker to another,
our trade stats assume a commission fee of 1 cent per share. This is in line with
commission fees at many firms who specialize in servicing active traders. If you
are an active trader and still paying "per trade" fees, you should consider switching
to a brokerage firm who charges "per share" commission fees because your savings
can be substantial, especially with smaller accounts. These firms also provide you with a more extensive inventory of stocks available for short selling. Feel free to e-mail us for specific suggestions.
Scratches - All trades that resulted in a net gain
or loss of less than $100 (including commission fees) are not included in our
performance results because each of those trades are considered to be a "scratch."
By excluding both winning and losing trades of such a small amount, one can more
easily make an accurate analysis of key statistics such as win/loss ratios, avg.
gain/avg. loss ratios, etc.
Average pricing - Because we sometimes scale in
or out of a trade at various price levels, average entry and exit prices are automatically
reported, rather than each individual buy & sell price for partial shares of
the same trade. Italicized text on the trade detail pages indicates an average price
was used. Similarly, an individual trade date in italics indicates that MTG scaled
in or out of the trade over the course of several days.
Hypothetical results - The performance results and
share sizes reported are hypothetical and for educational purposes only. The goal
is for a trader to learn how to properly manage risk in their own accounts. Realistic execution prices are used, but
actual trades of our "picks" may or may not have actually been executed in our trading account. Therefore, results may vary due to market
factors including lack of liquidity, slippage, and commissions. Simulated trading
programs in general are also subject to the fact that they are designed with the
benefit of hindsight. No representation is being made that any account will or is
likely to achieve profits or losses similar to those reported. Morpheus Trading
Group may or may not have actual positions in the ETF and stock trades it presents
to subscribers. Similarly, our hedge fund (Morpheus Capital) is typically positioned
in many more trades than are actually presented to newsletter subscribers.
As always, please e-mail editors@morpheustrading.com if you have any questions or comments.
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