Post-trade analysis of primary trading account

I’ve been working on organizing the trading log from my main account. The main account used to be with TDAmeritrade but as of this year is with MB Trading.

The primary strategy was swing-trading, hoping to hold the position long-term (a few months). Anything less than a few months usually meant a cut-loss, or was a short position and so profits were taken a lot quicker. Records go back 3 years.

Conclusions reached:
MSWT = My Swing Trading System

• MSWT loses money in downtrends, even when short.

• MSWT began losing equity since September 07 and not the absolute top (October 07)

See:


















• MSWT has not been able to return money even taking longs since April 08, as measured only by closed positions (I’m currently holding on to three positions, one is profitable so far).

• I had previously experimented with tightening stops but returned back to the arbitrary 7% stops thinking it (tightened stops) was ineffective, in actuality it was doing okay until the “system death” – See:
















(Blue column represents beginning of experiment with tight stops. When symbols begin to be red this symbolizes the beginning of system death. Trade # as green is simply representing a market uptrend)

• There are things beyond my control at this stage which affects profitability greatly: Not being a professional trader yet means I’m simply not available intraday (especially US markets *1). This affects entries, exits and money management (pyramid technique and scaling out when positions goes against you). This also applies to my other systems whose time zones are friendlier.

• Commissions totaled 35.34%(TH if you read this, what I sent you was a miscalculation) of my profits, but this was beyond my control until recently (as I was under 18 when I began trading, the account was opened under someone else’s name – family situated overseas). Moved to MB trading earlier this year and I’m paying $4 average for a round-trip instead of $20. I plan on moving to IB once I turn 21 (they do not permit use of margin for anyone under this age).

• I’m limited in my research capabilities as a result of lack of resources (should not be a problem later). I will eventually get a job at a trading firm. Either soon at a prop, or after university at an investment bank.

• Most cheap trading software is ****. MSA does not allow me to plot the highest point within my trade, thereby reducing the apparent drawdown. E.g. I buy ABC @ 10. Sell @ 15. Looks all fine and dandy on a graph, but it does not capture the fact that ABC had been @ 30 at one point (I thought this would be considered important)

• My swing trading system has potential, but it is very limited. I should restrict it only to very strong markets (look for local ones rather than US) and begin pushing the trades aggressively. It has to be tightened and go to cash most of the time. When I have the resources I will research it further and try implement my ideas from other areas into it: e.g. economics.



Here are images of the equity curve constructed in MSA:
Please note: $11,200 was set as beginning equity as that is roughly how much of my own money I wired in over the years.
The murderous $20 commissions are also factored into this equity curve.
Also volume is kind of pointless as it is only measuring shares traded and not the amount of money/capital at work.

Equity curve:












*1 – If you’re wondering why I traded/trade US markets: Cheaper charting data, more competitive commissions and all the books I read were easier for me to apply to US markets.

My recent foray into futures has been extremely profitable, especially as of this week when I moved my gold trading operations to MB trading (trading mini-gold contracts) from the small experimental CFD account (estimated $40 fleecing vs $3.1 for a round-trip with $30k contract value).
But I'm not an idiot: once the gold bugs and the easy crowd leaves I won't be good enough to take on the pro's.
I am going to concentrate on this while the opportunity is still there.