Part 1. BWT Trade Performance 2010 - 2011 Here is an update on Josh Hayes trade performance.

Results from January 1, 2010 through July 31, 2011 confirm his mastery of three key principles: 1. Pick winners: 58% winners, 42% losers. 2. Let your winners run: average gain 30%. Average trade duration 77 days. 3. Keep your losses small: average loss -6%. Average trade duration 18 days.

The expected value per trade is +15%. BWT Trades 1/1/10 7/31/11

The scatterplot of trade returns is a stark depiction of how well Josh lets his winners run and keeps losses small.

Part 2. 2011 Performance The trendless 2011 has been a challenge for trend traders. 21 of 25 prominent trend following wizards are down for the first half of 2011 ( see http://www.automated-trading-system.com/trend-followingwizards-red-june/ ). BWT performance is off its longer term averages. For trades opened in 2011 (through July) the average per trade is 1%. Losses outnumber gains 64% to 36%, the opposite of the long term gain/loss average of nearly 60/40. The relatively low trade duration of 20 days reflects the lack of sustainable trends this year. Trades Opened in 2011

Part 3. Long vs Short Performance. How does BWT long performance compare to going short? Here I looked at all trades for 2010 and 2011 (through July). Here the gain/loss percentages essentially reverse: 62/38 for longs vs 35/65 for shorts. Longs have an expected trade value +17% and shorts 0%. Confirmation that shorting is generally harder for traders than going long. Long Trades

Short Trades

I also examined the 2010 vs 2011 short and long performance. The 2010 and 2011 short performance is not significantly different: both have an expected value of 0%. The 2010 short trades have a slightly better gain percentage (37% vs 31%) and a longer duration (31 days vs 17). The 2010 and 2011 long trade gain percentages are essentially the same (63% and 60%) but the expected value of the 2010 long trade was 20%, significantly more than the 2011 value of 13%. The average long trade durations were nearly the same each year (58 vs 55 days). Fourteen percent of all trades were short for both 2010 and 2011.

Final Note

This analysis examines Josh Hayes performance based on his self-reported trade data. It is not based on actual dollars invested. The results shown here would represent actual dollar performance only if an equal amount were invested in each trade. Finally, I have no association with Big Wave Trading except as a subscriber. I receive no compensation from BWT.