Saturday, March 08, 2014

Performance update

Below is an updated R curve, and a summary of the monthly returns achieved, and which have been extracted from the performance statistics shown here:





RATE OF RETURN
Month201420132012




January27.02%18.29%
February-2.90%3.38%
March
0.88%
April
-0.76%
May
2.29%
June
12.08%
July
-11.61%4.12%
August
21.45%4.81%
September
4.63%31.16%
October
3.26%7.18%
November
22.49%5.21%
December
12.69%-0.56%

Some points to note:
  • The above returns are based on changes in cash equity only. Open profits are only recognised when trades are closed;
  • On only two occasions in the period covered were the overall risk or position limits reached - at other times the level of exposure was significantly below those levels;
  • There were two occasions where no trades were initiated for 2 or 3 weeks, due to market conditions;
  • The months where there is a significant return made is when profitable trends, which may have been in place for weeks or months, have given an exit signal;
  • Past performance is not necessarily indicative of future results.
These returns have been achieved by NOT doing any of the following:
  • refererring or following advice from brokers or analysts, CNBC, Bloomberg or the general financial press;
  • researching and dissecting earnings releases, trading updates, other financial or fundamental information;
  • trying to predict what will happen, should happen or may happen regarding the direction in either an individual stock or the markets in general.
These returns HAVE been achieved by:
  • observing and identifying price trends;
  • trading in accordance with system rules and trade selection criteria;
  • using good risk control;
  • cutting losses very short;
  • letting profits run;
  • being right less than 40% of the time.
At the end of the day, the only thing which can determine whether a profit or loss is made is whether price moves in your favour, or against you, after opening a position. Therefore, my whole approach is based around that sole metric - price.

There are thousands of different ways you can trade and make money. The trick is to find the right way for you. By utilising good risk control, developing the right mindset to trade, and cultivating a robust method of determining entries and exits which suit your personality, beliefs, timeframe etc., and has a positive expectancy, then decent returns can be achieved.

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