MAY 05 TOTALS:
26 Winners
22 Losers
6 Flat
Average gain per winning trade: 4.3%
Average loss per losing trade: 1.7%
Total profit/loss ... UP $15,116
Percentage profit/loss ... UP 7.2%
Year To Date:
Russell 2000 ... down <5.3%>
Nasdaq ... down <4.9%>
Dow ... down <2.9%>
S&P 500 ... down <1.6%>
The Portfolio ... UP 10.4%
Analysis: The stated objective all along has been to outperform the market. Year to date, that objective is being met. The secondary objective has been to be profitable when the markets are down. In other words, I don't want to show a better loss ratio than the market when the market is down, I want to still show a profit. May continued the streak of profitable months. For the 7 months I have been showing the trades publicly, 6 of those months have shown a profit. The only losing month had a loss of <0.7%>. So, losses have been kept to a minimum.
My winning trades are still outperforming the losing trades from a profit to loss ratio of 2-1. I want the winners to show twice as much profit as a losing trade shows a loss. I did a little better job of managing losses this month as my loss per trade dropped from 2.0% per trade last month to 1.7% per trade this month. My average gain per trade was relatively the same as last month. 4.2% per trade last month to a 4.3% gain per trade this month.
Since I have consistently showed a 2-1 profit to loss ratio on my trades since the beginning, in order to increase profits, you either pick up the activity or pick up the size of the position. In May I decided to pick up the size of the positions as I went from 5% of the portfolio on every trade to 10% of the portfolio capital on every trade. Activity, (the number of trades), only picked up slightly. It was the position sizing that made the difference this month.
Most of the previous months have me with more losing trades than winning trades but because I kept losses to a minimum, I was still able to show a small profit. This month the market did well and I ended up with more winning trades than losing trades which also helped overall performance.
Best performers:
STMP ... up 14.3% (Long position)
MT ... up 9.4% (Short position)
MICC ... up 8.3% (Short position)
PII had 2 trades that brought a 9.2% profit total. (Short position)
Worst performers:
FORD ... down 3.4% (Short position)
VIP ... down 3.3% (Short position)
EAGL ... down 3.3% (Short position)
Suggested Improvements:
I closed May on weakness. Nine out of my last 10 trades are showing losses, although I'm keeping losses small. When in a losing streak, and they will come, it's best to lower the size of the positions or lower the activity (number of trades) until the streak ends. I will lower the activity in coming weeks.
Best decision of the month:
Picking up the size of each position from 5% of the total portfolio capital to 10% on each trade. Since the trading plan is conceptually sound and I have consistently shown that winning trades can beat losing trades by a 2-1 margin with regard to profits and losses, picking up the size of the trade doubled the amount of profits I made this month over last months strategy.
January totals:
Message 21002734
February totals:
Message 21090136
March totals:
Message 21190623
April totals:
Message 21279591
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