Sunday, August 29, 2010

August 2010: Failed to Meet Target

We started the month with $1,914.08.  At 4% per week, we expected to end this period with a balance of $2,275.03.  However, three margin calls later... maybe four...  its a blurry hazy recollection right now...  anyway, the end balance was $1,774.64.  Our account is still up 47.87% from inception July 2010 while the DJIA is up 4.30%.  More important, however, is what lessons were learned this month.  I don't mind losing some money as long as I don't lose the lesson.

One of the first things learned is to try and not leave trades open over the weekend.  You never know what newsworthy event will occur between Friday afternoon and Sunday afternoon that will cause your open trade to shift drastically for the worse.  This ties with the second thing learned: don't trade Sundays.  All this makes perfect sense now.  All my margin calls came either Monday or Tuesday and were caused by trades left open over the weekend that shifted on me after weekend events.  One or two of those calls also had to do with trades opened on Sunday before a reliable trend was established.  So, for the next trading period: (i) try to close all trades by Friday, and (ii) don't trade Sundays.

Unfortunately, I could not close my EurUsd trade Friday so it carried over the weekend.  Fortunately, no major news means no erratic movements to push the trade against me.  The same cannot be said for a UsdChf short trade also left open during the weekend.  It has gone from a 90 pip profit to a 35 pip profit as I write this.  Hopefully, they'll close profitably before Friday.

Another planned change is to further tailor down my use of margin.  I will go pretty close to baby steps and then try to build on that.  This means I may not achieve my 4% profit per week target for now but hopefully we'll come up with a way to consistently make those profits.

So, as far as targets for September is concerned, we want to finish the month with $2,158.43.  This would be five straight weeks of 4% profits per week.

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