This is the first issue of our Trading Report Monthly Wrap, a detailed look at where we made and lost money during the month.
In an attempt to improve our service, we will now report our performance on a monthly basis, dividing our trades into three portfolios, Australian Stocks, UK Stocks, and Global Markets, which comprises commodities, currencies, bonds, and US indices. Going forward, we will report overall portfolio results for each of the three trading accounts, each in their home currency, AUD, GBP, and USD.
For each trading portfolio, we will provide
- A table of the closed trades from the month, with a combined Profit and Loss (P/L)
- A Portfolio Performance Table. The information in this table is rolling, i.e. the trades for the month are added to this table on a continuous basis. This table contains trades that were opened after 1 Dec 2008.
Below are a few notes which provide further explanation.
Current Account Balance – includes all closed trades from 1 Dec 2008 to the current month end
Overall Return – Total P/L to date, as a percentage of our starting balance
Win % - Percentage of trades where we book a profit
Scratched Trades – Trades where we were stopped out at break even
Max % Drawdown – This is the maximum amount, in percentage terms, in which our account decreases from our maximum equity line. Graphically, it is the maximum distance between our Maximum Equity (Pink) Line and our Current Account Balance (Blue) Line in the chart below.
Australian Equities
Overall, we had a solid month on Australian Equities, booking healthy profits on four out of the six trades that were closed out during the month. In addition, we took a small loss on Woodside Petroleum (WPL), while exiting Seven (SEV) just below breakeven. In total, we made AU$3,243.20 for the account, or 6.24% for the month.
In regards to the total portfolio from 1 Dec 2008, we are up just over 7% after 10 trades. As a reminder, we are risking a relatively small amount of capital per trade, either 1 or 2 percent of our account balance.
Another positive on the Australian portfolio is the low percentage drawdown, which at its maximum has only reached 2.08%.
Closed Trades for February 2009
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
UK Equities
With UK equities, we also closed out six trades, to yield an overall profit of GBP 77.25. Although we only booked one losing trade, you can clearly see it had a big impact on the account. If you remember, we risked 2% on ANTO, and were stopped out at our initial stop, which is not what we like to see. Nevertheless, after a slow start, we clawed back to finish with a profit, up 0.33% for the month.
As evident in the portfolio performance table, UK equities remain down 5.36%, after a tough December and January. Nevertheless, our equity line has turned up and is heading in the right direction.
One aspect of the account that we expect will change over time, is the average size of our winning and losing trades. Differing to the Australian Equities account, after 12 trades, our average loser is actually bigger than our average winning trade, not what we want to see. This is mainly because we had quite a few trades stopped out just below breakeven, and not trending to reach our target. However, we expect this will improve over time.
Closed Trades for February 2009
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
Global Markets
In February, the Global Markets Portfolio was all about Spot Gold. We set five buy recommendations, building a sizable long position as the market rallied. After exiting the trades via SMS we booked a healthy profit of US$3,620 for the month, which equates to 15.21%. Feedback from some of our members suggests that many took a much larger exposure!
In regards to the portfolio, after trending slightly down during December and January, this portfolio is now showing a profit of 9.7%.
Closed Trades for February 2008
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
The Month Ahead
On the equities side, we expect that the renewed selling pressure we have seen over recent weeks will prove to be the final thrust to the downside. While we still need to trade whatever opportunities the markets present, our bias has clearly moved to the long side, so expect to see more buy than sell recommendations this month. This stands true for both equities and the S&P500.
In terms of global markets, we stand ready to buy gold, however we need to see more chop and consolidation. Furthermore, we are closely monitoring crude oil and natural gas for buying opportunities, both of which appear to have found a bottom.
With the currencies, we continue to wait for a top in the US Dollar. Once in, we will focus on selling the USD against other currencies, with the GB Pound likely to be the currency of choice at the moment.
So to wrap-up, markets at the moment are all about the US equity market and risk aversion. We stand ready to buy many markets, across currencies, commodities and equities, however we first need to see equities put in a low.
Stay tuned to the watchlists and happy trading!