Portfolio Trading Explained
Portfolio trading involves managing multiple trades across different instruments to optimize profitability while mitigating risks. Traders analyze their portfolio's performance by tracking winning and losing trades and calculating their overall profit and loss (PnL).
Example of Portfolio Trading Over a Year
Assume a trader starts with a $50,000 trading portfolio, executing multiple trades across different assets over the year.
Trade Performance Summary
| Trade | Asset | Entry Price | Exit Price | Result (Win/Loss) | PnL ($) |
|---|---|---|---|---|---|
| 1 | Gold (GC) | $1,800 | $1,850 | Win | +2,500 |
| 2 | NASDAQ (NQ) | 15,000 | 14,900 | Loss | -2,000 |
| 3 | Gold (GC) | $1,850 | $1,900 | Win | +2,500 |
| 4 | NASDAQ (NQ) | 14,800 | 15,000 | Win | +3,000 |
| 5 | Gold (GC) | $1,900 | $1,870 | Loss | -1,500 |
Total Performance
After five trades, the trader’s net PnL is $4,500. Portfolio trading helps in spreading risk and increasing the probability of long-term profitability.
0 Comments