February 3, 2013
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Trading Update: January Performance
I was so focused on my current trade that it wasn’t until Friday that I realized that I ran out of “month” and so had a performance summary to generate.
Usually during the final week I start figuring out how I’m doing and what I’m going to say to reflect it, but since it caught me by surprise I wasn’t sure what it would read, except that it would be negative due to my current trade in progress:
January Performance
Started off well, jumped into a counter trend trade too soon and got pushed back.
This chart is also a good example of why charting performance is so transparent. Some folks may wonder why I don’t just post monetary gains or losses for the month. If I did that, the month would be positive as my actualized gains easily exceeded my actualized losses. By charting performance, I have to show what’s going on in my whole account during that time period whether I actualize the gains/losses or not. It prevents me from potentially hiding internal losses that haven’t been actualized yet- which is something many dubious trading sites that are trying to sell their services do.
January Performance Vs Indices
I’m disappointed that I made a directional mistake like I’ve done in the past, but I’ve learned some more things this month that should prove to be very useful. Trading is essentially creating your own learning manual of “Do’s and Don’ts” based on your particular trading style. And unfortunately, the typical way to figure out what the “Do’s” are is to experience what a “Don’t” is first hand.
Imagine if you were on the street without a rule book and had no advance knowledge of how the traffic system worked. You would have to figure out what all the behavior and symbols mean. You would notice the pretty lights changing colors but only after having accidents would you realize you need to stop at red. Or that a stop sign means just that- but for how long? This is basically what trading is like – trying to figure out the “rules” and how they apply.
This is also what keeps trading fascinating for me- it’s a continual learning experience where I get graded by the quality of my trades and my ability to learn from my mistakes.
Comments (4)
Do you do more day trading or do you hold more positions overnight?
@Konrado - I mix it up. Ideally, I like carrying swing positions while trading the short term volatility.
You’re spot on in saying that every trader writes their own learning manual – I just wish my mistakes weren’t so expensive!
@grasping_straws - True, the biggest lesson traders face in how to limit losses to minimize the damage done by mistakes. One technique that worked for me was reducing my trading size significantly That way I wouldn’t wind up with these bigger leveraged amounts that could wind up turning against me until I started getting more consistent gains.