Friday, June 07, 2013

Cash equity curve update

The last few session have seen an erosion of open profits in a number of positions, as the volatility increased in the markets combined with the indices moving in the opposite direction to the prevailing trend. This is to be expected, and, while frustrating, the giving back phase it is all part of the trend following strategy. 


Trying to 'time' a top or exit may mean cutting your profits short. I do still have long positions open that are close to their trend highs, having weathered this week's drop in the indices quite well. I therefore have no intention of closing those positions - who is to say they won't continue their move up over the coming days?

Below I have shown an updated chart of the cash equity curve as of last night. This is based on those trades called in the private twitter feed, and which are available to those in the mentoring programme. I mentioned in this post about, by being very aggressive in cutting losing or non-performing trades, you get a 'staircase' effect in the curve - the sideways movements when small losses are countered by small profits - and the movements up coming when profitable trends are extinguished. To this point, the cash equity (i.e. excluding existing open profits) is now up 136% in this period. As you can see, this week has seen the next move up...

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