JUNE 05 TOTALS:
9 Winners
15 Losers
3 Flat
Average gain per winning trade: 5.8%
Average loss per losing trade: 1.7%
Total profit/loss ... UP $8582
Percentage profit/loss ... UP 3.8%
Year To Date:
Nasdaq ... down <5.4%>
Dow ... down <4.7%>
Russell 2000 ... down <1.8%>
S&P 500 ... down <1.6%>
The Portfolio ... UP 14.7% - $32,534 in profits.
The Portfolio has been up and running for 8 months now and in those 8 months, these are the results:
The Portfolio ... UP 21.7% - $46,654 in profits.
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 still want to show a profit. June continued the streak of profitable months. For the 8 months I have been showing the trades publicly, 7 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 better job of that in July. My profit to loss ratio was actually 3-1, a nice improvement there, as the markets were up in the earlier part of the month. I continued to do a good job of managing losses this month as my loss per trade was maintained at my previous best of 1.7% per trade this month. My average gain per trade improved to 5.8% from 4.3% last month.
This was a good month and I have to take into consideration I was on vacation for 10 days where I didn't do any trading at all.
The winner vs losers ratio continues to show more losers than winners. This confirms the importance of cutting losses short. With the chart set ups I'm using, trades should show a profit almost immediately. If the set ups don't confirm, I take a small loss and move on. The strategy goes to show that you can still outperform the market when you have more losing trades than winning trades as long as you keep your losses to a minimum. My largest losing trade in June was 2.8%.
Best Performers:
DHB ... up 10.8% (long position, snap back set up.)
COGT ... up 10.5% (long position, snap back set up.)
QLGC ... up 7.5% (short position, failed test into a declining 50 dma.)
Worst Performers:
ARM ... down 2.8% (long position, failed snap back set up.)
TIBX ... down 2.8% (long position, failed a 50 dma test.)
DNR ... down 2.3% (short position, failed negative momentum set up.)
TTWO ... down 2.3% (long position, failed snap back set up.)
Suggested Improvements:
None at this time. I did a good job of managing losses and was able to squeeze more profits out of winning trades.
I think we can now see how effective a strategy is when you look at short term trading from a standpoint of cutting losses short and capturing the momentum of price swings in a 2-5 day time frame. Over the past 8 months, the portfolio is up 21.7% at a time when the markets are down. This is where you find out whether your strategy is good or not.
Most people can turn a profit in a bull market. Most of the time, a rising tide lifts all boats. The true test of your strategies come when the market is down. Are you outperforming the market or are your results in lock step with the poor market conditions?
The reason I prefer the short term time frame so much is because it places you in position to cut your losses very quickly. Since I don't take huge drawdowns or losses, I don't need huge gains to get back to even, never mind turning a profit.
November 04 totals: Up $10,550 or up 5.2%
Message 20901017
December 04 totals: Up $3,570 or up 1.8%
Message 20912410
January 05 totals: Up $2,460 or up 1.2%
Message 21002734
February 05 totals: Up $656 or up 0.3%
Message 21090136
March 05 totals: Down $1,540 or down 0.7%
Message 21190623
April 05 totals: Up $4,180 or up 2.0%
Message 21279591
May 05 totals: Up $15,116 or up 7.2%
Message 21375934
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