pt, are the number of trades round trips or buys and sells?
The system you have outlined appears to have 67 trades a year.
If someone started with $10,000 last year, the transaction costs would have taken 10% of that at $15/per trade. With a 16% gain in the system for 2005, it takes it down to on par with buy/hold for 2005 when transaction costs are factored.
Why not figure a simple $15 per trade transaction cost when calculating the returns and a starting value of $10,000 or $20,000?