Tuesday, 27 May 2008

New: See Trade Returns on My Updated Portfolio Page

I've just updated my Portfolio page with returns from each ongoing and recently closed trade. I think they'll be quite interesting to track. I've also updated that page with my trades as of this week's open of trading - selling my long base metals position and U.S. banks short position, and going long U.S. banks and the Russell 2000. I talked about the signals behind those trades in this post Friday. Incidentally, I think that portfolio table also shows something important about trading: even when some trades have extreme profits, there are always others that lose some money. Drawdowns are something that paralyze a lot of traders and investors, leaving them in a muddle about how to react. They highlight what I think is one of the most vital aspects of trading: risk management through pre-defined stops and proper position sizing to fit your own personality and account size. With those elements in place, I think you can trade much more confidently and, with luck, more profitably. See more on my own risk-control systems here (scroll down to "Portfolio Allocation" and "Stop"). Good luck this week.

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