Q3 2013 Trading Performance Review

It’s October and y’all know what that means!? It’s time for my Q3 review!

If you’ve been following me over the past few quarters, you’d know that I struggled quite a bit. Here are some stats to help me explain what I mean:

Total Number of Trades: 11
Wins: 2
Losses: 7
Breakeven Trades: 2
Win % (winning trades / triggered trades): 18.18%
Average Winning Trade in %: +.50%
Average Losing Trade in %: -0.34%
Largest Drawdown: -1.30%
Total Realized Profit / Loss in %: -1.29%

It was another tough quarter for me as I couldn’t find a rhythm at all with the crosses. A lot of that had to do with the uncertainty about monetary policy from the world’s central banks, as well as shifting economic data, going from positive to negative.

Overall, I took a 1.30% dent on my account, which in hindsight, isn’t terrible. And when compared to one of my personal benchmarks, the “HFRX Macro: Discretionary Thematic Index” at Hedge Fund Research, I’m not too far behind their average YTD return of -0.28% (as of Aug) of funds in their index. There are a lot of other traders out there doing much, much worse during these unprecedented times, but of course, I’m trying to catch those traders who did kick butt.

In any case, here’s a chart of my percentage change for this past quarter:

cycloQ3

Thoughts on Q3 2013

Adapting to a Fluid Environment

In Q3, market themes and drivers were much more fluid as we got closer to the FOMC’s “Septaper.” Sentiment flip flopped back and forth on whether or not we would see a reduction in the QE3 program, and the potential affects it would have on the markets. Outside of the US, we were seeing something brand new from central banks in the form of forward monetary policy guidance. Also, the possibility of violence in the Middle East increasing–mainly the Syrian Conflict–had traders searching for safety one day, then switching to risk the next.

The list of news stories and event risk goes on and on, and I think I could have done a better job adapting by switching to shorter-term mentality and/or 1:1 R:R trades. There was just too much shifting in news and sentiment to go for anything bigger.

Making Adjustments on the Fly

To go along with “Adapting to a Fluid Environment” I definitely could have done more to adjust in real-time. This probably wouldn’t have increased my win percentage, but I think I definitely could have hit out of trades much sooner for smaller losses once sentiment shifted.

In my last quarterly review, I told myself that I would “plan to be less aggressive with taking profit.” I believed I could still bag big wins with so much news going on, but the reality was there wasn’t a lot of opportunities to catch huge runs.

Always Late to the Party

The majority of my trades were trend setups: entering the market at trendlines and/or retracements into trends. After reviewing all of my trades, in hindsight, I think I was way too late to catch the trade. For example, in my last trade of the quarter–short EUR/NZD–the pair topped out near the end of August around 1.7200, and I tried to jump in the trend when it was already down 1,000 pips!  This was the case for quite a few of my trades.  I need to be more aggressive in recognizing trends earlier and taking them.

Of course, the list of trading errors doesn’t end with those three points, but those are the main ones I’ll be focusing on to improve my performance for these final few months of 2013: being more flexible to incoming events, adjusting my trades quickly if sentiment shifts, and to not wait so long to jump into trends.

I hope all of you reading had a great quarter. Feel free to tell me about it or share your thoughts in the comment box below!