My trading statement in Nov 09

Apologies for having overlooked the updating of the trading records. Have been busy fine-tuning this strategy. The return in November ‘09 was lower than in previous months - at about 20%. As noted from the statement, the win rate in the trading outcomes was actually rather low. In fact, the proportion of winning trades was less than 50%. The reason why it was still profitable was that the exit strategy was designed to cut losses short and take advantage of the occasional occurrences of strong trends. Psychologically, a trading stategy like this is very hard to follow, as you would be taking losses very often.

In my numerous back-testing experiments, I’ve realised that changing the entry setups doesn’t change the trading performance much. It is very often the exit strategy that will significantly change the trading performance. As such, my focus has been on improving the exit plans.

I am still in the midst of fine-tuning the exit strategies in this trading method to enhance its long-term profitability and reduce its vulnerability to sideway market conditions (although it’s never possible to totally predict and avoid ranging conditions). While doing the fine-tuning, this strategy was not traded in December. This account has resumed trading in Jan’2010. Hopefully, this year will produce good and consistent returns without increasing risk exposures too much.