Portfolio Performance in August : -32% ...

Comments :

August was a brutal month for me as the portfolio experienced a large drawdown on the last day of the month. I will be taking an indefinite break from trading. The strategy, which I had been constantly employing failed me terribly. The double digit loss percentage took place at the last day of the month, an abrupt end to a net positive daily performance through the month. Einstein was probably right - the most precious things in life are the experiences which one retrives from their pursuit of wealth

Looking ahead on the market, I am starting to doubt the rally in the stock market. It seems that there are some deflationary pressures at work (Bonds are heading higher while commodities are being subdued. Stocks in the meantime are having a feast) but it is hard to say anything substantial at this point. I think the next few months toward the end of 2010 will tell us where we will be heading in 2011. Until then, I hope to come back with a new post with better news on my trading experiences.

Portfolio Performance

Since inception (15 March 2010) : +3.01%

July 2010 : 2.22%

BarclayHedge Currency Traders Index : +0.52% (as of 9 August 2010)

AlternativeEdge Short Term Traders Index : -0.42% (as of 9 August 2010)

Comments

July was a good month. Stocks around the globe rebounded, to the extent of more than 5% in some countries. The portfolio outperformed the currency traders index and the short term traders index last month. My experience in trading so far has taught me that "no one can effectively predict the direction of the market"; rather, increasing the value of the portfolio is a function of effective risk management. I had tried to repeat what I did in June last month (by increasing leverage), but there were a lack of opportunities in the market, as volatility dwindled through the month.

As expected, the market has turned inflationary. Wheat has touched a 2 year high as Russia banned exports. And oil prices together with equities have headed higher. Bonds prices on the other hand, have also returned positive returns. All this, is a result of money printing and the subsequent rise in asset prices.

Portfolio Performance

Since Inception (15 March 2010) : +0.67%

June 2010 : +0.65%

BarclayHedge Currency Traders Index June 2010 Performance : -0.06% (as of 10 July 2010)

AlternativeEdge Short Term Traders Index June 2010 Performance : -0.05% (as of 10 July 2010)

Comments

Performance in June was somewhat surprising from a late rebound in the portfolio. It was by grace that I managed this result. I geared up the portfolio in a bid to recover my painful loss in May. In early June, I experienced initial success in my trades but was determined to extend my winning streak. Looking at the market in the short term, I think we could be set up for more volatile trades in future and the economic environment is turning inflationary. A repeat of 2008 might pan out, where oil heads higher but stocks stays lower or drift sideways.

My outlook is as follows

Bonds to head higher / Neutral

Stocks to head lower

Gold is Neutral

Oil to head higher / stay supported

US Dollar to head lower

Portfolio Performance

Since inception (15 March 2010) : -3.12%

May 2010 : -0.96%

BarclayHedge Currency Trader Index : 0.89% (as of 19 Jun 2010)

Comments

Performance has been disappointing amid a volatile month for various asset classes. The recent month proved to me that the indicators were not entirely accurate and the importance of crisis management. If I could sum up the month of May, it would be an humbling experience.

My outlook is as follows

Bonds : Neutral

Stocks : Mildly Higher

Gold : Lower

Oil : Mildly Higher

US Dollar : Mildly Lower

Portfolio Performance

since inception (12 Mar 2010) : 0.75%

April 2010: 0.66%

Benchmark : 0.54% (BarclayHedge Currency Trader Index as of 15 May 2010)

Comments

It's been a long time since I last blogged. All this time, I have learnt much about currency trading. So far, the market has been kind to me as performance has been up to par.

The recent Greek crisis has been affecting investor confidence. There was a sell off in various risky assets and the only 3 things I know that have been going up are the US Dollar, Bonds and Gold.

Here is my outlook for the various asset classes

On Bonds : Higher in the short term (at lease for a month, but I think they could U-turn after that)

On Stocks : Weak in the short term, higher in the medium term but the longer term is down (this could be nasty)

On Gold : Higher in the short term

On US Dollar : Higher in the short term