January 2010 Trading Performance Review

2010 didn’t begin well for me.  I experienced my biggest drawdown so far at -3.95% (see Figure 1 for my account balance graph) in my demo account.  Given that I only risk 0.2% per trade, this is a relatively substantial setback.

Ironically, I was in the process of filling paper work to open a live account when this performance setback hit me.  Change of plan.  Now I’ll have to postpone live trading until I can at least recover my demo account balance.

To do that, I tightened up my risk exposure and focused on playing only my best setup.  By the close of the month, my demo account is sitting at -1.2% for January.  At least I have made it some way from the bottom with a few good trades.  This is also the first negative month for me since beginning trading forex in September, just 4 months ago.

January 2010 Demo Account Balance

Aside from my performance, a notable change this month for my trading is the fact that I’ve been barred from trading during the day.  This forced me to trade less, which is a good thing.  On the other hand, I’m not able to manage my stops as often as I would have liked.  As such, I’ve been helpless at times and watched some profitable positions turn sour.  Whereas before, I would have at least moved my stops to breakeven when the price moved away enough.  Obviously, this calls for a drastic change to my current trading strategy.  For one, I’m looking at higher timeframes for my trading now to catch slower moves.  Secondly, my top priority for the next few months is to develop some trading bots to manage my risks while I’m away.

Performance Statistics

Monthly Metric    January    (December)

Sarting Fund    $5,617.44
End of Month Fund    $5,550.02

Total Net Profit    -$67.42    ($148.33)
Gross Profit    $375    ($591)
Gross Loss    -$442   (-$443)
Profit Factor    0.85    (1.34)
Net Profit %    -1.20%    (2.71%)
Max. Drawdown %    3.95%    (1.91%)

Sterling Ratio    -0.15    (0.41)
Excess Return    -1.26%    (2.66%)
SDev Return per Trade    0.11%    (0.12%)
Kurtosis    1.85    (17.38)
Skewness    1.01    (3.30)

95th Percentile P&L    $12.23    ($11.97)
5th Percentile P&L    -$8.43    (-$5.73)
Net Profit Mid 90% Only    -$117.84 (-$46.96)

Total # of Trades    186    (276)
Percent Profitable    41.45%    (40.77%)
# of Winning Trades    63    (95)
# of Losing Trades    89    (138)
# of Break-even Trades    34    (43)

Average Trade Profit %    -0.01%    (0.01%)
Average Winning %    0.11%    (0.11%)
Average Losing %    -0.09%    (-0.06%)
Ratio Win% / Loss%    1.20    (1.94)

Max. Conseq. Winners    8    (9)
Max. Conseq. Losers    20    (18)
Largest Winning Trade    $22.66    ($47.44)
Largest Losing Trade    -$14.30    (-$11.64)

Avg. Time Held [hrs]    0.73    (0.26)

Goal for February

My goal from the previous month is to think more and trade less.  Well, I managed the latter part but the former still requires work as evident by my negative return this month.  For February, my strategy is to keep trading with half the risk exposure (i.e. 0.1% per trade) to recover my account back to its all-time high in beginning of January.  I’m just about 2% away at this moment.

My goal for February is to get acquinted with MQL4 so that I can begin to develop expert advisors to manage my risks during the day and overnight.

Related posts:

1. February 2010 Trading Performance Review
2. December 2009 Trading Performance Review
3. October 2009 Trading Performance Review
4. November 2009 Trading Performance Review
5. First 2010 trading drawdown analysis on the verge of a new record