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Category Archives: Performance

An active accounting of the absolute returns achieved or not at every month end.

2016 was clearly an interesting year for all traders; Russia, China, Brexit and the US elections.  It certainly provided us with alot of volatility, however, what was difficult at times was that the volatility was irrational and we couldn’t make sense of it.

The year was driven by what central bankers were saying, politicians sparring and the rise of populism.

We executed a total number of 56 trades and withdrew 22 trades.

We now have an audited absolute return of 117.28%.  Although, it is significantly lower than the 178% we achieved in 2015, we are still higher than our long term absolute return objective of 88%.

I am going to amalgamate both Q3 and Q4 performance together, so we can just tidy up the overall reporting for 2015.

Q3 we locked in trading profits of 17.85% and in Q4, we locked in 8.68%.

I did all in all 26 trades in the second half the year averaging about 4 plus trades per month.  This also includes the trades that was withdrawn because market didn’t trigger the straddle trades.

I still have two AUDUSD call options; one expiring on 26 August 2016; BE 0.7303 (288bps premium) and another expiring on 9 July 2016; BE 0.7420 (280bps premium).

The overall absolute performance for 2015 is 178.08%, not a bad year.

Let’s see whether 2016 will bring me and us the same good fortune.

Happy trading and remember be prudent, be focused and above all, don’t be greedy.

Q2 proved to be a decent quarter with sufficient opportunities despite disruption from Greece.

I did a total of 13 trades and 2 options and turned over US$165Bn. The absolute trading profits was 56.25%.  I had one negative drawdown of 4.4%.

Q1’s absolute performance was 95.3%, so this gives us a total cumulative absolute return of 151.55% year to date.

Not to shabby for 2015. I think I am incline to close the books for this year and not trade anymore, no point taking on risks as we are moving into the last quarter of the year where liquidity starts weaning.  Anyway, it’s kind of difficult to stay away from the markets when one is being bombarded with information and feeds everyday.

 

 

2015 has turned out to be a great start!

After a challenging 2014, the first quarter of 2015 presented wonderful opportunities to us, which of course, we capitalized on the opportunity.

For the first quarter ending March, we did a total of 13 trades, total volume of 155Billion and locked in an absolute return of 95.3% against our principal investment.

A phenomenal start to the year.  As you can see, we averaged about 4 trades a month.  In hindsight, we missed some opportunities, however, the important point is that we made on every trade with no drawdown at all.

I believe the appropriate style of trading is more one of strategic and opportunistic trading, and not trading for the sake of trading.

Going forward, this year will be another year where central bankers will be focused on; what they say, what they feel and what they are not saying.

Stay very close to the media, it will continue to tell us about the sentiment and volatility in the marketplace.

Now that we have already met our target for 2015, I do not intend to take on any unnecessary risky trades and will just continue doing what I have been doing………slow………steady………and confidently.

Here’s wishing us all continuing success in fx trading for the rest of the year.

2014 was a year of I don’t know what to say!

Practically, the first half the year was dead boring with the markets not really moving anywhere and we saw that in the low volatility.

Nonetheless, we as traders owe it to ourselves to sniff out trades to the best of our abilities.

What made me feel very uncomfortable was the fact that the global economies were diverging which means that through time uncertainty will spike up volatility.

I decided to reduce our leverage in our trading from our usual 5X to 10X down to 3X to 5X, this of course, means that our absolute returns will also be affected.  However, my view is that it is better to be safe than sorry.

Our average leverage throughout the year was 4X of our principal.

We did 28 trades throughout the year both spot trades and options which was less than half of the trades we did in 2013.

We decided to stop trading at the end of October as the markets was just getting too crazy with too many central bankers talking too much and at the wrong time.  The markets was just swinging like a see saw………violently.

We locked in an absolute return for 2014 of 68.36% p.a., a far cry from the 290% p.a. we did in 2013.

I shall be writing my thoughts for 2015 in the near future.

October was a difficult month for me as I really couldn’t ‘sniff’ out trading opportunities, maybe, it’s because I am already comfortable with what I have made from trading year to date that I didn’t want to take on any unnecessary risks.

Nonetheless, as traders we owe it to ourselves to continue trading!

I did 2 options and 3 spot trades, all the trades were profitable giving me an absolute profit of 28.6%.

Year to date, my absolute return is 250.1%, adding on this month’s trading profits, the total absolute return for this year so far is 278.7%.

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.

 

August was a busy month for me as I needed to spend time on another business involved in tocotrienol, so I didn’t really have time to trade, nonetheless, I managed to do three trades through the month and won on all three trades.

Absolute performance for the month was 10.6% and the total absolute performance year to date is now 199.1%.

Next month is going to be a crazy and volatile month with the QE tapering question being answered during the third week of September; is Bernanke going to or not going to initiate the start of the tapering exercise?

Well, let’s see, certainly September is going to be an exciting month and I will make sure I am there to capture opportunities in the marketplace.

July was a mixed month for me as I was not very comfortable with the market, however, as traders we still need to be in the market to stay sharp and to be relevant.

I did 9 spot trades; lost in 1 and won in 8, ROE or absolute performance was 18.5%, adding it onto my year to date total absolute performance of 170%, I am now 188.5% for 2013.

The month of June was a busy month, I did 9 trades and two options.

I lost on two trades and nearly loss big time on the EURUSD call option but managed to recover and actually made a profit.  You will recall that the two month EURUSD call option had a breakeven of 1.3175 and expiration on 28 June 2013.  I squared at 1.3268 and it hit a high of 1.3365 just before expiration.

The yum yum trade was the 2 week USDJPY call option.  I just felt the JPY strengthened too much too quickly and a significant correction was going to happen.  So I bought a call option at 94.15 with a breakeven at 95.86 and I bought back the option at 97.50 for a nice profit of 16.8%.

So for the month of June, I am up 33.3% in absolute returns.  So far, YTD trading profits in absolute is 136.7% with this month’s trading profits, it brings the absolute returns year to date to 170%.