closed my 5 short gold contracts out for a nice price..... BUT... Bought long silver contracts as a hedge on the gold decline. I lost 15% of my portfoilio in 30 seconds. I did the unthinkable -- doubled my position when i thought i saw a bottom, and miracle of miracles picked right and made it all back. From -75k to +6K in the last few hours. I am taking a hiatus. This was the worst mistake of my trading career and only decent intuition and mostly luck saved my ass.
poorest personal trading night of my life, but i end up 2% for the coming week. Still, i am not proud. but thnaks..
"Storm clouds on the horizon...." Performance for Week 17: Weekly % Return = +0.75% 2011 P/L = +8.0% Current DD = 0.0% MDD = -12.05% I made money, but i had a bad week. Let's face it, just about every position I'm in is not working. My big positions, as has been the case for a while, are in FXI and EWZ. They are killing me. I was short natural gas and Japan - murdered and stopped out on both. I have a few things that worked ok, like long NQ minis and long 10-year treasury notes. But, to a large degree, I am treading water at best. I made money last week for one reason only -- i was scalping Silver futures, which is tremendous fun, but terribly dangerous. I learned my lesson on Sunday night where I temporarily lost 15% of my total portfolio value in just a few seconds. By taking even more totally inappropriate risks I was able to make back everything plus 3% to the good side. It was not my proudest moment, but i escaped without any monetary damage (although i am mentally scarred). As a result of my antics with Silver last night, i start the week up by 3%. Already lost 1% of that today on position trades...lets see how the rest of the week goes. I WILL NOT BE DOING ANY DISCRETIONARY TRADING FOR THE FORESEEABLE FUTURE, unless it is specifically to hedge some of my open system trades. This is about to be a very dangerous time...I sense bad things on the horizon. I believe China weakness is leading the way and the market will rollover (but i know not exactly when). I am going to start layering in hedges over the next 5 - 7 days.... HB 2000 ps. by the way i am now lagging the S&P pretty badly. I am supposed to be in gold and ES as part of my system trades, but i didn't let them run. If i had, I would be trouncing the 500. Lesson learned. Hopefully.
"A week like non-other...." Performance for Week 18: Weekly % Return = +2.66% 2011 P/L = +10.6% Current DD = 0.0% MDD = -12.05% I started off last week, on Sunday night, scalping silver futures for shits and giggles. During this fateful evening, i got caught in a downdraft of epic proportions. Before i could literally think to make a decision, I had lost 15% of my portfolio. We are talking all profits from this year and most from last year. I did exactly what shouldn't be done; i doubled down and tripled down and caught the bottom. I managed to not only close down my 15% loss but actually ended the night up +4%. But i tell you what -- that 4% did not make me happy, and the entire couple of hours took a stress toll on my that I won't soon forget. It was the swiftest loss in terms of pure dollar amount i've ever experienced (about $75k in just two minutes or so). I am lucky to have learned such a valuable lesson without any financial cost. Now, on to the good news. The rest of the week turn out reasonably well given the overall carnage in the market. My systems got killed, but I did well discretionary trading. A few notable milestones for this week: 1) my YTD return broke 10% putting me well ahead of the S&P 2) I have escaped my full lifetime trading drawdown (since 2004). I am up 3k or about .6% since 2004 (including commissions). That probably equates to 1/100 of a penny per hour invested in this effort, but at least i have not "lost money." 3) Ive achieved these gains with my biggest positions, EWZ and FXI, delivering absolute body blows. If they start to move, my profits could accelerate dramatically. All in all, a great week, in spite of my early discipline problems. But, those lapses will help me focus on risk at a time when my accounts have reached significant all time highs. And, as of COB today, this week is off to a tremendous start as well...
"A trend change is upon us.." Performance for Week 19: Weekly % Return = +2.31% 2011 P/L = +13.8% Current DD = 0.0% MDD = -12.05% Another good week, and my returns are now more than double the S&P 500 performance. Volatility of late has been more than acceptable. This was, in fact, a bad week for many of my systems trades. It appears a trend change may be upon us, with many of my "weak dollar' and emerging markets trades closing. At the same time, recent system positions helped offset some of the carnage (long treasuries, short wheat). Discretionary trading was the difference maker this week, turning what should have been a losing week into a winning week. Going forward, I'm going to change the format here a bit to include system-generated trade information. Position Exits generated this week: Long EWZ Long British Pound (fut) Long Swiss Franc (fut) Long Gold (fut) Long Aussie Dollar (fut) Long Euro (fut) New Positions entered this week: Short Wheat (fut) Long TLT Existing Positions remaining open: Long FXI Long Nazz (fut) Long Eurodollars (fut) Long Canadian Dollars (fut) Long MUB So, as you can see, many a weak dollar trade has closed, though a few remain open. FXI closed only 10 cents from my stop price, so I very nearly went to all cash/bonds on my long term equities system. At this point, my portfolio is pretty balanced such that I should be shielded from significant downside if the market begins trending down. However, should the dollar resume its downtrend and the market strengthen, I will initially miss out on some of the profits. In any case, I like my position here at week 19....well on pace to achieve my targeted minimum return of 20% and a good shot at exceeding my expected return of ~30%. Cheers, HB
Update for last week....a little late in getting to it. Performance for Week 20: Weekly % Return = +.95% 2011 P/L = +15.2% Current DD = 0.0% MDD = -12.05% A decent week given overall market performance...my system is pretty evenly balanced long/short at the moment, but discretionary trades in PMs made the difference. Position Exits generated this week: Exit long Canadian Dollars (fut) New Positions entered this week: Long ILF Existing Positions remaining open: Long FXI Long Nazz (fut) Long Eurodollars (fut) Long MUB Short Wheat (fut) Short NG (fut) Long TLT Cheers, HB
HB, are your open positions waiting to hit a specific target or are you trailing stops to allow them to run, or...?
Hi, Sorry for the delay, just saw your question! I am running two systems, one is a long term equities trend following system i run against weekly charts. I run it against a basket of about 10 ETFs that are fairly broad-based. Basically, this system uses something approximating the 45-week MA line (with some tweaks) as the stop loss. This holds true until a trade goes very "in the money" (more than +20%)...at that point the stop tightens up quite a bit. I've backtested this system over about 10 years and individually on the S&P500 for about 30 years. The second system I run is a futures based system based on daily close price action. This one is more medium term, and I more or less use a fixed % stop loss on these trades. However, I trail the position with a volatility based stop using several days ATR. As a trade in this system goes in the money, the stop is tightened via reducing the number of ATR days. Both systems are honestly pretty simple. My goal with these systems was to simply have a way to achieve 20%+ returns with lower volatility than the broad market. I have a lot more confidence in the equities system than the futures system, but i think both are likely to work.
Another good week last week... Performance for Week 21: Weekly % Return = +1.9% 2011 P/L = +17.9% Current DD = 0.0% MDD = -12.05% At this point in the year, my results are outpacing my goal pretty decently. Up 18% before the midpoint, and my goal is ideally about 30% (with 20% as the minimum threshold for "success"). These results come with a major caveat, however -- the two "systems" i am running are currently at +6% and -4%, respectively. Note these results are far under my own results, and far below the historical backtest results for both. What does this mean? Well, the biggest question it raises is whether or not my systems are really profitable. However, I believe the bad system performance is adequately explained by market conditions, and when those conditions change the systems should ramp up considerably. So, I have to hope this is just a "lull period", and that performance will pick up in the 2nd half of the year. If that does happen, my overall performance could, and i say COULD, far outpace my stated goals. The second question is, why am I up 18% if my systems have performed so poorly? Two reasons -- one is that I pair my equities system trades with protective puts, and i have "timed" those trades in such a way as to take advantage of the volatility in some of my emerging markets trades. For example, my system has had me in EWZ for most of the year, playing it between 70 and 80 with protective puts has been easy and profitable. Due to limitations of my technique and tools, i have not been able to backtest the use of protective puts with this system, so it is an "unknown" variable that so far has worked well. The second is i have been discretionary trading silver and crude with great success over the past month or two. I am mostly not doing this going forward, so it will not be a frequent contributor to my returns. Position Exits generated this week: Exit Long Nazz(fut) New Positions entered this week: Long Swiss Franc (fut) *i have not opened this trade yet but was supposed to yesterday...will open it on a retrace Existing Positions remaining open: Long ILF Long FXI Long MUB Long TLT Long Eurodollars (fut) Short Wheat (fut) Short NG (fut) Interesting to note that both systems continue to position me very cautiously...it is clearly a dangerous environment, and these systems have spotted it before i ever would have. Cheers, HB