A return from the depths.... Here are this weeks stats: Weekly Gain: +2.5% YTD Gain: 58% Current % drawdown: -5.8% After saying last week that I was going to paper trade my new commodity system until it incurred several losses in a row, I actually ended up trading it. I realized that there was no clean way to enter after several losses. Basically, by the time four losses occurred, the system would already be in several other/new trades...so its really not possible. Therefore, i decided to just suck it up and begin trading the system as is. I am prepared to incur a major drawdown but certainly hope it doesn't start that way. Anyway, the week began horribly and I was initially another 3% down, as my equity trades in Brazil and China, along with futures trades in Sugar and Lean hogs all brutalized me. Amazingly, however, everything turned around on thursday and friday. EWZ has been on fire (especially when you factor in the 3 buck divvy), and China had a big bounce back. I actually hedged in my equity positions and began experimenting with hedging my futures positions by buying puts on some related ETFs. IN all my backtesting, hedging with options was never factored in, so it is a bit of a wildcard and may be net negative, but i believe it will be effective and although it may lessen my returns, is likely to smooth out my equity curve. Later this weekend I will post a more in depth analysis of this years stats, along with some core goals and strategy for this coming year. ciao
End of Year Performance Review Full Year Stats: % Gain = 58% $ Gain = 82k Total Roundtrip Trades: 1617 Total Commissions Paid: 51k Equity Profit: $112k Equity Commissions: $3k Futures Profit: -$34k Futures Commissions: $40k Options Profit: -$15k Options Commissions: $7k Looking at the above yearly summary data, one could easily conclude I should trade only equities and completely abandon futures & options trading. That may very well be true, but for the first 6 months of the year I traded with extreme leverage and nearly blew up in May. I shifted strategies in June with dramatic effect. So, its worth looking at the performance in each half of the year to see if there was a noticeable improvement as a result of the strategy shift. 1st Half of Year Performance: % Gain = -2.8% $ Gain = -4k Total Commissions Paid: 40k Equity Profit: $67k Equity Commissions: $1k Futures Profit: -$58k Futures Commissions: $35k Options Profit: -$13k Options Commissions: $4k 2nd Half of Year Performance: % Gain = +60% $ Gain = +86k Total Commissions Paid: 10k Equity Profit: $45k Equity Commissions: $2k Futures Profit: $25k Futures Commissions: $5k Options Profit: -$1k Options Commissions: $3k Its clear that my strategy shift after the near blow up in May accomplished what I intended to accomplish. I dramatically reduced my commissions, used far less leverage, and had reasonable profitability in equities and futures. I had a loss in both halfs of the year in options. I solely use options to hedge positions, so this is not completely surprising. However, it does call into question my hedging techniques. Something to look at going forward, but I will not make major changes based on one year of performance. Although my performance improved dramatically in the latter half of the year, I would still not grade my performance higher than a C. And for the entire year I would have to give myself a D. The fact that I recently changed strategies again is a pretty good indicator that I lack confidence in the methodology i've been using. I think i could probably be profitable long term with the way I was trading, but I'm not certain of it. However, I would need to focus on it fulltime which isn't possible now. While my results were good, my discipline continues to be fairly weak and that is my biggest concern about long term profitability. Lots of room for improvement next year, where i'll be focusing on longer term mechanical strategies that really require discipline. All in all, I have to leave 2010 happy that I was very profitable, and I made back all the money i've lost over a decade of trading. Further, rebounding from that horrendous 3-day $100k loss in May took real resilience and was the kind of lesson only a giant loss can provide. While i'm a long way from where i want to get to, I am leaps and bounds more advanced than i was at the end of 2009. I fully expect that within 3 years I will be trading/investing full time. I am bringing this HuggieBear thread to a close, and will open a new one for 2011 that focuses more on my new trading strategies and goals. Good luck to everyone in 2011... Weekly P&L <img src=http://files.iclippy.com/28421/1293911473.jpg> Equity Curve (what a brutal MAY!!!) <img src=http://files.iclippy.com/28421/1293911533.jpg>
I just posted a thread inviting assistance in "how to reduce commissions". Then came across this thread. I see you also paid a lot of commissions. Any thoughts on how to cut futures commissions. I found Zumo and light speed, two brokers who charge less but their platform is not to my liking. I trade oil futures only. Learned after a lot of experimenting, and trading several things at a time and all types of instruments, losing money and felt that for trading, there is no reason to trade multiple things. The movement in prices is generally concomitant in all commodities. So, i now trade oil only. I use only a small amount of my account (about 3% per trade and maximum total position of 15%, intraday), so have a rather large cash balance to fall back on. Occasionally though i have found myself overloaded (when i strayed away from the 15%)resulting in big losses. I am trying to control that part of my trading, not getting too extended. For 2010, i made 53%, paid just over 50K in commissions. Dipped below my starting equity by 7% once in 2010. Thanks.