Saturday, October 26, 2013

October is Ending

I think this month has been a pretty crazy up and down month for me in terms of FX. At the start of the month I was doing pretty well with my FX trades. The massive miss on the Cable short, as well as my Russell shorts really just blew me out of the water. It sounds horrible that I've pretty much lost 75% of my capital so far, but I have strong resolve that I can slowly work my way back to being profitable. So far, with each successive lost, I am learning more and becoming a better trade. I've finally booked in some profits that is keeping me just around my 25% of my equity mark. I am determined to slowly build up my account and hone my skills, and I want to do this without adding in more capital. This will really make me work towards my goal, and I now have a few pointers just for me to throw out.

  • don't look at anything less than an 1 hour time frame. The 15 min should be used only to confirm an entry point, and the 5 min only to confirm an exit point.
  • daily and hourly charts should be in sync, then just wait for the right opportunity.
  • it is better to wait for the right set-up, than to go into something just to lose money.
  • no trade is still an active decision that separates the trigger happy from the pros.
  • watch out for major news events, and make sure you set a SL if you're trading it.
  • it is better to be stopped out and retake the initial position once the trend is over
I think as long as I can keep reminding myself these rules, I will start losing less by getting out of trade that are not in my favour, as well as identify the winners with more certainty.

On the other side of things, my actual long term investments seem to be doing okay. As of now, my portfolio asset allocation is about 80% there. I'm waiting for more conclusive evidence to enter into my last 2 equities positions and get a proper commodity fund.

With the bulk of my fund purchases this month (8 funds added, for a total of 12), that means that the sales charges have kicked down my returns this month quite a bit, as well as most of the funds being bought at the mid and near the end of the month. With each additional top up to the fund, the sales charge will push down even less and less, until it would barely have a 0.1% effect on the monthly returns. This month's effect should be about 0.25% depressing on the returns, on top of the only half month gains.

I'm looking forward for my month end review, as well as planning my rebalancing for perhaps mid Nov, it looks like it will be the low of the commodities cycle then, I might be loading up on an extra portion then while slowly value averaging my portfolio.

Hopefully by the end of the year, I can have about a nice figure comfortably and earning returns above the bank rates but without the stress involved. Perhaps if I can keep this up for the next full 2 years, I think I might be able to get my own place at the next housing slowdown... honestly though, I hope for a mega market crash and meltdown, and hopefully by portfolio is really as solid as I think it is, and that I can pre-empt any crazy situations that comes around.

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