Saturday, August 31, 2013

August update - up and down

Following the big gains made in July (see here for more), August was a month full of volatility and stops being triggered. With the indices reversing direction and going down, there should have been a number of short trades taken. However, those that fit our criteria were very few and far between.

The change in market direction contributed to an erosion of open profits in some of the positions that are still open, and there were a further couple of instances were companies reporting earnings produced big adverse moves, further eroding profits.

Having said all of that, there are cumulative open profits in excess of 20R still being held. These positions will continue to be kept open until such time that the stops are triggered. Below is the updated cash equity chart based on these performance statistics, showing only closed positions. The overall performance shows an increase in purely cash terms of +141% since July 2012, with the gains from those open positions to be added in the future.

As I referred to in this post, I am quite relaxed about the small drop in overall performance in the month. I never factor open profits into my position sizing, as the methodology used allows prices to move freely up or down, providing they do not invalidate the prevailing trend. My existing positions have been fighting the direction of the general market, but the trailing stops have been able to move closer to current prices, which will help limit any fiurther erosion of those profits.

If you are interested in learning more on how you can learn to trade in this manner, click here.

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