Review week 8

I did not trade week 7. So here is the review of week 8.

2,6%, 1 winning trade on spot Gold.

XAUUSD or spot Gold, winning trade and new limit sell

Gold made a large move down on Wednesday. Thursday price retraced halfway. On Friday lower prices were rejected and price closed above a support level. That is why I decided to take profit and place a new limit sell at a lower break level.

Spot silver has shown similar price action. I also have a limit sell there.

Spot silver – limit sell order

Then the same story goes for Cable. Also: in week 6 I got stopped out on a short on the Cable. Looking back at week 7 and 8 I have to conclude that (again) would I have stuck to my method I would have made a very nice profit.

Cable – strong move down

The USDJPY could make another (small) move higher.

USDJPY –  Still ticking higher?

Continuing steadily

Looking back

The 2012 results were not bad and the beginning of 2013 has been according to plan. The AEX index has been pretty volatile this year. Since the beginning of the year the index moved about 5% up and then about 7% down. Luckily my portfolio performed nice and steadily. Just to get an idea of my overall performance since I started investing according to my plan I pasted my performance graphs of 2011, 2012 and 2013 (provided by my broker) together.

Blue line is my performance Nov 2011 – Feb 2013

As of November 2011 my equity has grown steadily by about 11%. The only draw downs have been relatively small draw downs that were part of consolidation periods.

Looking ahead

My strategy is basically a fund picking strategy combined with strict position sizing and risk management  So as long as I am picking the right funds and keep cutting losses in time I do not need to worry about the overall stock market outlook, right? Well, this is not entirely so. I am not hedging against market risk. I just look at fund performance numbers, get out when the numbers turn bad and move my money elsewhere or stay out of the market entirely. So it will help to formulate some general expectations on what the market will do. I mean, no one knows for sure what will happen, but there are some general rules of thumb concerning the flow of the markets. My way of looking at the markets is to just glance at daily candle stick charts with the Ichimoku cloud.
My expectations for the coming months are that the European stock markets will move significantly lower. US markets will become more volatile while moving side ways and the Japanese stock market will at least see a correction to the downside before it might continue higher. My benchmark, the AEX index, will, if it breaks below 335 move on down to find first support at 320 and then at about 310.
This is my outlook for until may 2013.

NL25 or AEX index, break below 335 –> more down side with first support at 320

Europe 50, definitely more down side if price breaks below the kumo

Japan 225 – is overdue for a correction. Will probably find support at the kumo

SPX500 – widening kumo indicates more volatility ahead. First strong support is at 1466

Once again, I write this down as it helps me in making my own investment decisions. This post is not an advise to buy / sell financial products. I just hope it inspires others to do the same and make their own analysis and have good luck and fun investing.

Review week 6

Result: -5% by one failed trade on the Cable

There is not much to say, really. Other then that the outlook for the cable is still bearish in my view. My stop should have been above the long red candle of Feb 1, but I thought this was just a to big a stop. Maybe I should just have (again) stuck to the rules of my method. If this means the stop is to big for my appitite, then I shouldn’t trade.

Failed short trade on the Cable

Last week (week 5) was a good week in which I gained 42%. This single run up made up for many small losses and then some. I have been recording my trades on this blog consistently since April 2012 and I wanted to see my performance in P&L compared to the money I put into the account so far. So I graphed out hte P&L curve since April 2012 normalized for the deposits I made. Here it is:

Normalized P&L since April 2012, +/- 130 trades

Well, that sucks. Totally inconsistent. Maybe I should consider commission trading. That way I would at least make consistent profits. It looks like I keep bouncing around break even by plus to minus 20%. I think I need to trade less and only trade the most obvious setups out there. That would mean I would only trade when there is this perfect trend according to the Ichimoku cloud. And then only trade inside bars that were preceded by candles in the direction of the trend. So really taking advantage of small consolidations / corrective moves within obvious trends.

But in order to be able to do this, I will need to watch the market less. Therefore it will help if I could have the marketed monitored automatically according to my rules. I am working on this. Untill that time I just have to quickly scan for setups manually everyday. It is important that I do this quickly, so I will not start to see trades that aren’t there.