Friday, April 1, 2011

End Month Performance of March (21st to 31st) - April 1st 2011

Traded the fourth week of March but not the last.

4th Week Performance -  March 21th - March 25, 2011

  • Open Week - Long GBP/USD @ 1.6233 from last end week - Closed @ 1.63077 - March 21, 2011
  • Open Week - Long WTI @ 102.28 from last end week - Closed @ 104.97 - March 22, 2011

WTIGBP/USDTotal CentsTotal Pips
+269 cents+74 pip+269 Cents74 pips

This was the performance from within the week though both these positions were initiated from two weeks ago and were unrealized gains.

The overall realized P&L:

WTIGBP/USDTotal CentsTotal Pips
+27 cents+198.7 pip+27 Cents198.7 pips

  • As you see from the realized P&L my second crude trade for the month was timed extremely poorly. For about a week and a half WTI was in down trend for about 2 ATRs. I sat through 2 ATRs of uncomfortable volatility. The proper risk management would have been to set stop loss at 1 ATR reassess on the third week then sat through another 1 ATR of downside volatility and setting it wide enough to be able to catch the recovery that we saw end month. That strategy would have garnered at least 300 - 400 cents vs the 27 cents I realized.  In the end though I'm glad I stuck to my views and convictions of seeing the 105 squeeze I was looking for. The move going into April is another story on its own for another day to tell...
  • GPB/USD trade was overall a very solid trade. I caught about 66% of the move up to about 1.64. I bailed early because I was going out of town and didn't want to manage my position when I was away. Also, wasn't sure how the UK inflation report was going to turn out. Even If I stuck through the inflation report which would have been about 100 pips more, the reversal was hard and fast and probably difficult to time. If anything I would have resulted in the same realized P&L. I sat through about Daily volatility of 100 pips or so before the move took off. 1 ATR risk management would have been sufficient but I was using broad 1.60 base support. 

So my total trades for the month of March realized P&L:

Total CentsTotal Pips
+981 cents+32 pip

Majority of cents come from crude exposure on front month trades (Brent, WTI) and with one week trading the dollar index.

The reason why the pips are so low was because of my poor poor poor NZD trade. Talk about bad timing. Fundamentally I was right but was trying to fight the crowd. In the end the move I wanted came and again came much faster than I expected. The pound was an excellent trade and had I de-leveraged a bit on my NZD trade the pip significants would have been greater. Either way 32 pips is better than negative pips.

Overall a very good positive month thanks to energy trades. My second trade was almost a disaster but I stuck it through. Better risk management would have improved P&L significantly. Got to stick to the discipline...

Analyze Capital LLC

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