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For the month of September, I did a total of 9 trades; 5 spot trades and 4 options.  I lost on one option and won on the rest.

What is important to bear in mind is that options is a great way to minimize your loss upfront and psychologically accept the cost or loss prior to executing the trade.  In other words, I made the decision on my risk appetite and was prepared to gamble away US$8,800 in premium cost of the GBPUSD Put Option.

Nett of the loss of the option trade which was a negative 8.8%, our nett absolute performance for the month of September was 51%.  Adding this on to our total absolute performance currently standing at 199.1%, bring the total absolute performance to 250.1% year to date.

Some of you may or may not yet have asked me the question as to how and why I measure my performance on an absolute basis rather than an accumulative basis?  An accumulative return distorts the overall return when one is making good monthly returns, the base ends up being larger and larger and then, the return for the on going month becomes smaller relative to the larger base, even though in absolute terms, the monthly return achieved could be considerable.

Absolute returns are more realistic, I set aside my principal monies or collateral in account X and then, I deposit my profits or debit my losses from a separate account Y.  My absolute returns is simply profits or losses for the month divided by X expressed as a percentage and then adding it on or subtracting from Y.  Y would be the total aggregate net profits divided by X expressed as a percentage.  In other words, if US$100,000 is my X and I have a value of US$200,000 in Y, then my absolute return is 200%.

I trust the explanation clarifies any queries you may have.

 

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