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 – June 2010
With the US recovery story hampered by a string of disappointing economic releases the markets shifted into increased volatility. The 1 hour chart below depicts the move from early June towards mid June resulting in a +7.49% gain over this period. Only to see the second half of the month plummet -8.00% to the downside. Talk about BIG swings.
60 minute:
We were stopped out of Westfield Group after the release of disappointing US employment numbers, which saw the global equities markets plummet by more than 3% on the day.
Closed Trades for June 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 above, 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 – June 2010
June was another good month for the UK portfolio with the agility afforded by the use of the SMS alerts as the key driver in our ability to bank profits quickly. The average duration of our trades has come down considerably over the past few months. We are still booking decent sized profits but are taking losers much faster and in many cases are exiting trades for a small gain rather than waiting to take a loss.
We once again hedged short positions with a long index trade on the FTSE that compensated us for the losses on our existing short positions. Had it not been for a large loss due to slippage sustained on the BP trade this would have been another very strong month. We managed to rack up a few solid winners in the last week of the month to finish up 3.11% for June, a good result for what was quite a choppy range bound month of trading.
Closed Trades for June 2010
Portfolio Performance since 1 Dec 2008
Equity Chart since 1 Dec 2008
Global Markets – June 2010
With the global equities markets retracing 2009's rally, we decided to stay clear of this segment of the market to focus our attention on FX and commodities.
We recommended three trades during the month of June, with two winners and one scratched trade to finish the month up another +1.08%. The since inception return is looking good at 33.27%, with a winning strike rate of 61.11%.
Closed Trades for June 2010
Portfolio Performance since 1 Dec 2008
Equity Chart from 1 Dec 2008
The Month Ahead
Looking forward to the new financial year, we believe that there will be some good profit opportunities. Global markets are currently testing some major levels, 5000 on the FTSE, 10000 on the Dow and 1040 on the S&P 500. Should these levels become breached, there will likely be an acceleration of the trend.
On the flip side, should they hold we will likely see solid interest in a reversal. In either case, as long as we get a strong trend in either direction we will be ready to take advantage of it.
Keep your eye on your phone for those SMS alerts!
Prosperous Trading!