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.
AU Equities – March 2009
For the month of March, we closed out four positions in Australian stocks, all longs. As evident in the table below, after reaching our target at $5.75, Oil Search returned the bulk of the profits. Our two positions in Wesfarmers booked over $500 for the account, while our position in Linc Energy was stopped out just above breakeven. In total, we made $3,493.70 for the month, a return of 6.53%.
The aim of the Monthly Wrap is not only to summate our overall performance, but also to reflect on, with the use of hindsight, aspects of our trading where we can improve.
In regards to Wesfarmers, although we booked a profit on this trade, looking back, we were a little aggressive moving up our stop loss. As shown on the chart below, shortly after we were stopped out at $18.39, prices rallied to reach our initial target at $19.80. As is often the case, it in not the initial buy and sell decision that determines success, but how we manage the trade once a position is open. The lesson to learn from this example is patience, patience, and more patience.
In regards to the overall account figures, after the month of March, we are currently running at a 71% win rate on Aussie stocks, with the account now up 14%.
Further to these trades, we currently hold positions in Arrow Energy (AOE), OM Holdings (OMH), and Energy Resources of Australia (ERA), all of which are performing strongly.
Closed Trades for March 2009
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
UK Equities – March 2009
After recording healthy returns on our Australian Equities and Global Markets accounts, the UK Equities proved to be somewhat of a disappointment.
In March, after closing out six trades, we yielded a negative return of GBP 1001.92 or -4.28%. Although, we got off to a good start by banking a profit on International Power (IPR), consecutive losses then followed, pushing our monthly return into the red. However, whilst reviewing our losing trades, we discovered that it was not necessarily our initial analysis that proved to be wrong on all occasions, but rather two key factors, timing and trade management.
Consider Dana Petroleum (DNX)
We opened a long position in DNX at 1042p. However, prices failed to rally initially, instead range trading between 1020p and our stop loss of 913p. In the end, our stop loss at 938p was triggered nine days after the trade was opened.
However, looking at the chart of DNX now, our analysis proved to be correct, as prices eventually did rally, reaching our target of 1176p. On reflection, we were early on the timing. We entered the trade on what we thought was a break from a bullish flag, however, this pattern failed to materialise. Instead, we should have waited for the definitive break of the February high at 1065p.
Again, similar to the Australian Equities, we have several positions currently open which are performing strongly.
Closed Trades for March 2009
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
Global Markets – March 2009
With our Global Markets accounts, we closed out three positions for the month, booking profits on GBP/USD and Copper, while exiting our long position in Crude Oil just above break-even. Although we booked a small profit of US$10 on this position, for performance reporting we have classed this position as a scratched trade. The win rate on this account is also running at over 70% after four months of trading, with the total account up 12.6%.
Closed Trades for March 2009
Portfolio Performance from 1 Dec 2008
Equity Chart from 1 Dec 2008
The Month Ahead
In terms of UK and Aussie Equities, our bias is again on the long side for the month of April, so expect to see more buy than sell recommendations. And with commodity prices (in particular base metals and oil) continuing to demonstrate signs of a sustained recovery, expect to see more and more buying opportunities in the energy and mining sectors.
With the global markets account, we will again be looking to sell the US Dollar against the major currency pairs, particularly the GBP and AUD. Furthermore, Oil and Copper are both on our watchlist for potential trades this month. Unfortunately, it appears a deeper correction is on the cards for spot gold, so we will have to watch this market from the sidelines for now.
Stay tuned to the watchlist and happy trading!