By Garth Mackenzie (12 January 2025)
60% winners
33% losers
7% breakeven
Potential 104% return in 6 months based on 1:2 risk to reward assumption
As we all get settled into the new year and prepare for what 2025 holds in store for us, it’s useful to look back on past winners and losers to take these learnings with us into the year ahead.
I’ve done a deep dive into the ideas I’ve shared with subscribers in the SA Watchlist every Friday over the last six months of 2024.
The process is to scan through all the charts in my watchlist on the JSE and to tease out the technical setups that are looking the best. These are then placed onto a focus list to monitor for potential trade opportunities based on the technical strategy suggested.
These are unbiased analyses and can be either long or short.
I usually publish a list of 5 or 6 stock trading ideas to monitor each week.
Those of you who know me and have followed my work for a long time will know that I’m generally humble and won’t blow my own trumpet. I know just how quickly the market can humiliate arrogance. Being honest about past successes and failures is an important part of building trust.
With that in mind, I share below the stats of my past six months of trade ideas in the SA Watchlist, along with a brief description of each idea.
Since the beginning of June 2024, I published 130 trade ideas in the SA Wacthlist.
Of those, 121 met the criteria to initiate a trade entry.
72 of those resulted in wins with the price targets being met (60%)
40 of those were stopped out for a defined loss (33%)
9 closed for a breakeven after initially working but then failing to reach the target (7%)
The remainder either didn’t meet the criteria to enter a trade or their results have not been concluded yet.
A 60% win rate is pretty decent by my standards. That’s around 2 out of every 3 trades as winners. It’s also pretty consistent with the last time I assessed the results of my SA Watchlist ideas.
If one makes a conservative assumption that you’d assumed a capital risk of 1% on each of these trade ideas, and that the winners all generated a 2:1 reward to risk ratio (many were better than that), then it means that your winners made 144% of capital and your losers cost you 40% of capital for a net total return of 104%.
This is theoretical of course. I don’t like the type of marketing that splashes these kinds of numbers across the headline because in reality it’s never as easy to achieve these types of figures as what hindsight might suggest. But these are the numbers based on back testing of the past 6 months’ worth of discretionary trading ideas published here each week.
Looking back over past trades is always a good practice and should be done by all traders periodically as part of a process of learning and improving.
In that respect, I made some useful observations when looking back over the past 6 months of SA Wacthlist ideas:
I noticed that many of the trades that were stopped out actually went on to work a little while later after they were stopped out. This reminded me of something Steven Goldstein said to me when I was on his High Performance Trader coaching program. He said that in his own experience, he watched his trades that were stopped out and then recovered to start working a short while later, and he re-entered those trades. It meant that his initial idea was right but his timing was a bit early. Often those trades that were re-entered went on to be big winners.
In my own observations of the trades I’ve covered here, I noticed that too. The ones that were stopped out and then recovered back above the stop loss level actually worked out nicely afterwards in many cases. Re-entering those trades here would have enhanced the performance further.
The best trades were often the ones that started to work out quickly. This has been my experience throughout my trading career and is a well-covered observation from other traders I follow too. The best trades usually start to work almost immediately.
As always, the stop losses needed to be adhered to in order to contain losses. That is the key to consistent success as a trader. Keep the losses under control and allow the winners to work.
As a reminder, this is what you get as a subscriber to Traders Corner for £19.90 per month on an auto-renew subscription:
A Daily Desk Journal report each day with video analysis on the SA Top40 future, S&P500 and other actionable trade ideas when they appear.
You get a chat forum to ask questions and chat with other traders as well as myself.
Once a week you get an SA Watchlist of JSE stocks setting up for potential trades.
Once a week you get an International Watchlist of US stocks setting up for potential trades.
Once a month, an update of the “Stocks in the Vault” long term share portfolio.
NEW: A live trading portfolio video is shared every Wednesday with actioned short-term trades of the past week, as well as trade setups worth considering for the week ahead.
Once you’re subscribed, there is no lock-in. You can cancel your subscription at any time.
Obviously past performance is no guarantee of future performance. But what I can guarantee is that I’ll keep looking for high probability trade setups, and publish them for subscribers when I see them.
Happy trading
Garth Mackenzie
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