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 of commodities, currencies, bonds and US indices. We report overall portfolio results for each of the three trading accounts, each in their base 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 % Draw down – 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 – July 2010
Short and sweet, we closed out of our long position on David Jones at a loss towards the end of the month, only to see it rally higher. It was a quiet month on the Aussie Equities portfolio as we saw more opportunities on the UK Equities and Global markets, which we took full advantage of. The aim of the trading report is to take advantage of all markets. For this reason, at times, members will notice an influx of trades being recommended on any one of our portfolio's, Aussie, UK or on the Global markets and vice versa. Our goal is to provide profitable recommendations without the restriction of being jurisdiction based.
To take advantage of all our trading recommendations, members simply need to open a CFD account to do so.
Closed Trades for July 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 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 – July 2010
July was another strong month for the UK Equities Portfolio as we finished up 7.81% for the month. Once again our ability to be agile and trade from both the long and the short side enabled us to capitalise on what was quite a choppy range bound market. However, the range was wide enough for us to bag some decent winners. We started the month with two quick trades on the FTSE 100, one long, one short that had us quickly in profit. We then managed to follow that up with a solid winner on BP on the long side as well as relatively big winner shorting Barclays.
Many of the trades we entered could have made more money if we had held longer, but we feel that it is prudent to take gains when they are there and rotate our capital into fresh opportunities. When trading you will rarely buy at the bottom and sell at the top. Our goal is to control our risk, keep our winners larger than our losers and endeavour to produce more winning trades than losing trades. We are looking for consistent returns rather than lottery picks.
Closed Trades for July 2010
Portfolio Performance since 1 Dec 2008
Equity Chart since 1 Dec 2008
Global Markets – July 2010
On the Global Markets portfolio, we managed to bag two out of three winning trades. Our two long recommendations on the GBP/USD worked out very well. We managed to enter long just as upside momentum was building, which enabled our price targets to be reached in a matter of days. On the other side of the fence, we were stopped out of our short trade on crude oil as the rally higher continued.
The since inception return has risen to 34.21%, with a winning strike rate of 61.40%.
Closed Trades for July 2010
Portfolio Performance since 1 Dec 2008
Equity Chart from 1 Dec 2008
The Month Ahead
Looking forward, we expect August to be a tricky month to trade. August tends to be a low volume month as many market participants go on holidays or elect not to trade in what tends to be a volatile month due to the lack of widespread participation. We will continue to trade with tight risk controls, hopefully managing to snipe out some quick profits on opportunities that present themselves.
Prosperous Trading!