More humble pie was to be served during the second quarter. Results were still in the dumpster (Bad), just not as ugly as the 1st quarter…
April 2015 Performance
April 2015 Performance Vs Indices
May 2015 Performance
May 2015 Performance Vs Indices
June 2015 Performance
June 2015 Performance Vs Indices
As you can see, it’s been a tough slog with working on my trading system. Working with relatively narrow stop losses leaves little room for error. Either my entry is accurate or I’m getting stopped out.
With month after month of bad results during this time, the question may arise as to why not trade on a sim during this time until the trading “kinks” are worked out? The answer is I am switching back and forth between the two. I test my refinements on the sim and also via back test tracing, then try it on my real account. I likely should stay on the sim account longer, but even though the sim is identical to the real account, the critical difference is risk of loss. It’s very hard to duplicate the fear of loss on a sim account. That fear of loss, when correctly channeled can give you a much higher level of clarity during a real trade – it’s similar to “battle awareness” where your focus becomes extra sharp.
Nuance is everything in trading- all the seemingly minor moves or zig zags add up in setting up for bigger moves, and clarity of insight is key in how to properly group and interpret market price action. Being able to identify, prepare, and act on trading set ups is the separator between gains and losses. Understanding proper nuance can only come with time, practice, and after trade analysis. This is where perseverance comes in – to keep refining the process to account for these nuances inside one’s trading system.
The charts don’t show it, but R&D is telling me my system is almost there, save for these minor nuances. The tight stops are forcing me to come to terms with resolving the issues rather than try to guess with wider stops. Allowing those unknown nuances to remain in my system only increases uncertainty and risk of loss. Every trading loss gives me another opportunity to locate and resolve these errors with proper post trade analysis.
2nd Quarter 2015 Performance
2nd Quarter 2015 Performance Vs Indices
Looking at these results makes me long for the days of 2012 when I was posting all those months of double digit gains, haha! =) One of the key differences between now and then is it was more “instinct” and a rough trading model than precision back then and I wasn’t using stops. My instincts proved to be correct, but there were times when I had to also endure gut wrenching negative double digit swings in volatility due to a bad entry with no stops.
I knew that to establish long term consistency, instinct would have to be replaced by more precision and a better mastery of market entries and my trading model would need to be updated accordingly. July’s results begin to show the fruition of the improvements made.