Black October. In case you think I’m “rigging” the Profit Run results today will be a testament to the challenges of trading. I hit my loss limit today (-1196.25). That’s the amount I where I say “uncle” and close up shop for the day. If you don’t have a loss limit/day when you’re trading you should. It’s the simplest, most fool-proof way of avoiding blowing up your account and/or digging yourself a hole so deep you can’t get out for a loooong time.
Some of the markets were cooperating, but most were not. The problem wasn’t picking the direction. The problem was that prices were ranging further than normal, stopping me out for a loss before I could realize a profit on the trade. Annoying? You bet! The mini-Dow (YM) had my number and spanked me more times than I care to count. Crude came a close second.
While I don’t like to admit to days like this (especially on a public forum!) I have to say that Risk Manager kept me from making it worse. Every position was the “right size” and even though I took losses I could afford each one. That’s the key to successful trading: never risk more than you can afford to lose.
H – Sold NQ 12-12 4@2668.50
Bought NQ 12-12 3@2666.25 $135 profit
Bought NQ 12-12 1@2668.25 $5 profit
Trade Profit $140
F- Sold NQ 12-12 4@2667.25
Bought NQ 12-12 3@2662.50 $95 profit
Bought NQ 12-12 1@2667.25 $0 profit
Trade Profit $95
F- Sold NQ 12-12 3@2662.25
Bought NQ 12-12 3@2662.00
Trade Profit $15
E- Sold NQ 12-12 2@2661.50
Bought NQ 12-12 1@2651.50 $200 profit
Bought NQ 12-12 1@2654.50 $140 profit
Trade Profit $340 profit
H- Sold YM 12-12 4@13053
Bought YM 12-12 4@13075
Trade Loss $440
H- Sold YM 12-12 3@13051
Bought YM 12-12 3@13066
Trade Loss $225
H- Bought YM 12-12 4@13086
Sold YM 12-12 4@13065
Trade Loss $440
F- Sold YM 12-12 3@13053
Bought YM 12-12 3@13058
Trade Loss $15
E- Sold YM 12-12 2@13049
Bought YM 12-12 2@13081
Trade Loss $320
F- Sold ZB 12-12 1@147-10
Bought ZB 12-12 1@147-07
Trade Profit $93.75
H- Sold CL 12-12 2@8612
Bought CL 12-12 2@8635
Trade Loss $460
CFTC rule 4.41(c)(1) applies to “any publication, distribution or broadcast of any report, letter, circular, memorandum, publication, writing, advertisement or other literature….” Commission rule 4.41(b) prohibits any person from presenting the performance of any simulated or hypothetical futures account or futures interest of a CTA, unless the presentation is accompanied by a disclosure statement. The statement describes the limitations of simulated or hypothetical futures trading as a guide to the performance that a CTA is likely to achieve in actual trading.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
