Tough Month - closed trades equity curve

I was just looking at how January went and it wasn't all that pretty - like many long term traders. Not surprising considering the All Ords is down over 10% since the end of June 2007. Any gains that may have been around at the end of December were severely damaged in January 2008. Still I have a slight profit for the year, probably similar to putting my money in the bank - which is where most of it is at the moment.

Most of the open trades have turned into closed trades over January. I have left open trades off this chart, although there are not too many of them. For the first time since I started trading systems the open portfolio is in a slight loss situation.

Currently drawdown from the peak on the chart (on the 24/12/07) above to current is around 11% and could go a little lower depending on what the open trades do.

I seem to be very busy of late with work, travel and other projects (obsessions!) but I am still able to follow my system, which is very fortunate given the state of the markets at the moment.

I am afraid that I have no words of wisdom. If you are trading a long term system that you "know" works then hang in there!

regards
stevo

TWO & OST

The TWO trade triggered in Christmas week whilst travelling. Volumes were very light so I exited over 2 weeks for a 53% gain.

OST was easier to exit and I got out in the Christmas week for an 8.6% loss.

The only other exit in December was KCN for a 16% loss.

Stevo

2007

Just a couple of charts showing closed trade performance (as per TradeSim style reports for those that use the software).

Performance that includes monthly drawdown, dividends and adjustments for cash etc will take me a lot longer.

The closed trade equity curve is looking ok - it's heading in the right direction.

I know that people like percentages but that is a little more difficult for me to produce, especially since money tends to flow in and out of this account.

Suffice to say this isn't paper trading results - this is real money. It wasn't a brilliant year (greater than 50% gain would be a brilliant year :) ), but I really have nothing to complain about. If I can average greater than 20% compounding over the next 20 years financially I will be ok. Some might think that this target is too low?

I have taken the Y axis labels off the charts but just assume that they are in dollars. The portfolios traded with a relatively static capital base up until the end of 2006, but the capital more than doubled in 2007. If you look back on the this blog you can probably make some extrapolations if you desire.

I have probably mentioned previously that adding capital can be quite challenging. If enough is added it can nearly be like starting the portfolio up again. Startup is the hardest time in a portfolio.

I have a lot of cash (around 40%) on the sidelines since the systems have mainly been off through November & December.

Wishing everyone the best in 2008!

stevo