I looked at the data in that table and put it into an Excel spreadsheet so that I could analyze several scenarios. Why? Because the table shows a hundred trades and didn’t account for commissions. Obviously, if one starts out with $100,000.00 then commissions are relatively immaterial. I don’t have a problem with that myself, but others may. To get the percent returns claimed in the table, you must start out with an initial investment equal to the index value at the beginning of the study, or $1,225.30.
In my results tabulated below, the term “Leverage” refers to a multiplier applied to the size of the initial investment. For instance, a Leverage of 1 represents an initial investment of $1,225.30, whereas a Leverage of 10 equals an initial investment of $12,225.30. As a comparison, one should consider the results of the Spiral method with the buy-and-hold method -- a Buy at the beginning of the study at $1,225.30 and a Sell at the last date of the last recorded trade, at $1,283.20, yields a cumulative gain of 4.73%. That would be the breakeven point provided you wanted to spend your life all day long watching a computer and churning your stock account. I still wouldn’t do that, even if I started with $100k, because a year’s effort (almost equal to the length of the study) is worth more than a return of 27.5% on $100k (ignoring the $1,598 in commissions on 100 trades).
Leverage...Initial Investment...Commission...Cumulative $ Gain...Cumulative % Gain
1 ................ 1,225.30...............$15.98................. (1,262.20) ................ (103.01)
2 .................................................... “ ......................... (926.40) .................. (37.80)
3 .................................................... “ ......................... (590.60) .................. (16.07)
4 .................................................... “ ......................... (254.80) .................... (5.2)
5 .................................................... “ ............................ 81.00 ....................... 1.32
6 ................ 7,351.80 .................. “........................... 416.80 ....................... 5.67
7 .................................................... “........................... 752.60 ....................... 8.77
8 .................................................... “........................ 1,088.40 ..................... 11.10
9 .................................................... “........................ 1,424.20 ..................... 12.91
10............... 12,253.00 ................ “........................ 1,760.00 ..................... 14.36
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