Since starting the trading log in July 2017 I have only posted two completed trades up to now. Why is this may you ask. Is it because I can’t be bothered to update my trades? Or is it because I am not fully committed to trading?..well the answer is no to both of these.
The strategy I have primarily been using relies on signals to tell me to enter a trade. It involves trading in seven different etf’s across various asset classes and all of these have been trending since July. I vowed when starting the trading log that I would only post new trades going forward. With this in mind I am currently invested in four of the seven etf’s after signals have indicated a trade and I will obviously post the results as and when these trades close. This is a long term strategy and is similar to an investing strategy in that sense, hence why trades are few and far between. The advantage of this is it reduces turnover and subsequently transaction costs.
You may notice as well that both of the completed trades were closed at a loss. Now I use a trend following strategy that I have rigorously backtested. The strategy relies on the big market moves and therefore has more losses than wins. When looking back the strategy has had approximately one win for every 2.7 losses but the average loss was cut a lot shorter than the average win hence making it profitable over time. I hope this goes a little way to explain the losses so far.
As I stated earlier I have only posted trades that have been signalled since starting the blog. If I had chosen to cover trades prior to this it would have covered the monster moves in the DAX and S&P 500 of recent that produced fantastic returns but I didn’t feel this was a fair way of diarising my journey.
I will continue to post my completed trades and i’m sure we will see some positive results in the not too distant future.
As a little extra bonus of recent I received an email this week from City Index, a broker that I use, to say they no longer charge for the use of a guaranteed stop loss until it is hit. The guaranteed stop loss ensures you will be stopped out at the price you set and you will not suffer from the big gaps/slippage. It is rare using my strategy that the stop loss is hit but if it is I am more than happy to pay for this security, previously you had to pay even for placing the GSL order which made the strategy much less profitable or increased risk.