Monday, May 9, 2011

SandRidge Energy, Inc. (SD)

While Chesapeake brings a slightly higher Reward-to-Risk ratio per trade, SandRidge is actually the better stock to trade based on overall dollar and percentage returns. 

1. SHORT the week of 8.4.08 at $37.59. With my stop at $61.31 the initial risk (R) on the trade was $23.72. Stopped out and reversed to long the week of 5.4.09 at $11.11. The percentage gain on the trade was 70.4%, and the reward-to-risk ratio was $26.48/$23.72 = 1.12.



2. LONG the week of 5.4.09 at $11.11. The stop was $5.30, so R = $5.81. Stopped out and reversed to short at $8.60 the week of 11.30.09. The percentage loss on the trade was -22.6%, and the reward-to-risk ratio was -$2.51/$5.81 = -0.43.

3. SHORT the week of 11.30.09 at $8.60. Using $13.17 for a stop, my risk was $4.57. Stopped out and reversed to long the week of 9.27.10 at $5.89. The percentage gain on the trade was 31.5%, and the reward-to-risk ratio was $2.71/$4.57 = 0.59.

4. LONG the week of 9.27.10 at $5.89. My initial stop was $3.84, so the R = $2.05. Closed last week at $10.36 with a $9.52 stop. The percentage gain on this trade is 75.9%, and the reward-to-risk ratio is $4.47/$2.05 = 2.19.

Bottom Line:
Winning Trades: 3 | 75.0% | $11.22/share avg.
Losing Trades: 1 | 25.0% | -$2.51/share
Average Trade: Gain of 38.8% | $7.79/share | Reward-to-Risk Ratio (R): 0.87

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