Sunday, July 22, 2012

CME Group (CME)

BUY signal the week of 2.6.12 at $291.59. My first stop was $234.34, so my risk (R)/share was $57.25. Stopped out Friday at $257.00, just $0.71 below my with a $257.71 stop. The percentage loss on this trade was -11.9%, and the reward-to-risk ratio was -$34.59/$57.25 = -0.60.

Once again I'm reminded of how important it is to use good risk management (I've actually been reminded of that more than a few times recently). In this case, using a 1% risk model limits the position/trading loss to just a -0.6% overall portfolio loss. 

History (beginning in 2003):
Winning Trades: 5 | 71.4% | +$82.42/share avg.
Losing Trades: 2 | 28.6% | -$50.54/share avg.
Average Trade: +36.8% | +$44.43/share | Reward-to-Risk (R): +1.92

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