How to Calculate Your Trading Execution Leak

Execution Report Filed by #8675-309

Your execution leak equals your average position size multiplied by your trades per month, your override rate, and your average loss per override. The formula is straightforward.

The Answer

The execution leak formula is: Average Position Size x Trades Per Month x Override Rate x Average Loss Per Override x 12 = Annual Execution Leak. For example: $2,000 average position x 12 trades per month x 30% override rate x 20% average loss per override x 12 months = $17,280 annual execution leak. Most traders are shocked by their number. The calculator at tradeexecutor.ai/calculator computes it automatically. The number only goes in one direction when traders see it for the first time.

RELATED READING

→ What Is an Execution Leak

→ Stop Overriding Your Trading Rules

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