CFD Trading Report Monthly Wrap, a detailed look at where we made and lost money during the month.
We report our performance on a monthly basis, dividing our trades into three portfolios, Australian Stocks, UK Stocks, and Global Markets, which comprise commodities, currencies, bonds, and US indices. We 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 2010
Due to our ‘short bias’ from early February, we carried over four short trades into the month of March. Three of the short trades were stopped out during the resumption of the upward trend of the ASX200. These were Crane Group, Boral and Adelaide Brighton, while we scored a winner on our short position on Sonic Healthcare.
We switched our bias to the long side taking positions on Brambles, Virgin Blue and Stockland Group, profiting on two of the three trades, while profiting on a short position on Lend Lease. In total we executed eight trades, four winners and four losers leaving us with a strike rate of 50% for March.
Closed Trades for March 2010
Portfolio Performance since 1 Dec 2008
Equity Chart since 1 Dec 2008
For the benefit of newer members, it is a good time to explain the Equity Chart below, which is a graphical representation of our trading results. The blue line is our equity line, and is updated every time a trade is closed out, while the pink line shows our equity maximum line. Put another way, this is the highest level our trading account has registered.
The account remains below our equity maximum line which was registered back in May. This is partly due to the current trading environment.
As a reminder, the aim of the Fat Prophets Trading Report is to identify short-term opportunities in trending markets, i.e., whether the direction is up or down, we need markets to be moving to make money. Even the savviest trader will struggle to make money in a sideways market!
When observing this chart, and with an appreciation of our trading philosophy, it is not surprising that the account has been treading water over the past three months. In times like this, it is important to remain patient and disciplined. Over trading will only chew through capital and reward your broker.
UK Equities – March 2010
March was a difficult month for the UK report. Following on from a strong month in February where we captured gains with some short positions and then managed to successfully switch to the long side. However, we underestimated the magnitude of the move higher.
A number of short positions that were opened towards the end of February were stopped out in March. These included trades on the FTSE 100, Kingfisher, Barclays and British Land. This miscalculation left us on the wrong side of the trend and late to the party on the long side. We have had to patiently wait for signs of a top to play a correction to the downside.
Closed Trades for March 2010
Portfolio Performance since 1 Dec 2008
Equity Chart since 1 Dec 2008
Global Markets – March 2010
The Global Markets portfolio finished the month of March with a 50% strike rate. We were stopped out of our GBP/USD currency trade, however made up for this nicely on our 94 point winner on the NASDAQ. The portfolio added another 3.42% to the overall portfolio performance.
Since inception, the Global markets portfolio has returned 30.10% on capital, with a winning strike rate of 64.44%.
Closed Trades for March 2010
Portfolio Performance since 1 Dec 2008
Equity Chart from 1 Dec 2008
The Month Ahead
Looking forward, we look to be at the early stages of a correction. It is difficult to trade the turn as market volatility increases which can lead to whipsaws and trades being stopped out prematurely. However as the trend develops it will become easier to bag some winning trades.
Prosperous Trading!