2012 Performance Evaluation (Part 1)

The main reason I maintain this web site is to keep myself on task with what I want to do.  Starting from the “ground up,” system development has been very difficult for me.  Without co-workers, it would be easy to give it up and do something else.  The web site keeps me accountable.

Along these lines, I want to spend some time focusing on performance to make sure I remain on course in pursuit of personal goals.  Getting focused on small details and losing sight of the big picture is very easy to do when you don’t have to check in with bosses and supervisors.  I will report here.

As a brief review, I took over the investing for my personal account in mid-2001.  In 2008 I resigned from Pharmacy and began life as a full-time trader.  My investing/trading approach has changed much over the years and that is important for the here-and-now.  With the performance statistics now updated through January 2013, though, I wish to first spend some time looking at the entire history.

Below is a graph of my total performance to date.  I have set the starting account value to be $100.  The first graph is plotted with linear scaling:

Since linear scaling can sometimes be misleading, below I show the same data with logarithmic scaling.  Note here that identical percent changes traverse the same distance along the y-axis:

In my next post, I will begin to analyze and to discuss these data.

Blog Reset (Part 1)

The goal for trading is consistent profitability over time.  I don’t feel I can stress that enough.

My last post is dated July 1.  I actually deleted my last post on an NDX butterfly backtest because it ended up being unprofitable for the first few years and was not worth pursuing further.  That leaves me 29 posts behind through September 8 (last week).

Let’s try to get that back, shall we?

Going forward, I’m going to spend a great deal of time talking about backtesting directional trading systems.  This is currently my main focus.  The aim is to find strategies that were profitable in the past to formulate into systems to trade with shares or options (liquidity providing).  System #1 will be relatively simple but will illustrate critical elements of the process.

Global Disclaimer

From options trading to futures trading to stocks and hypothetical results of proposed trading systems, I intend to show many things on this blog.

Everything presented on this web site is intended for educational purposes only.  I am neither licensed nor registered as a financial adviser; nothing here should be construed as personalized financial advice.  I have also added a Page accessible from the sidebar to reinforce this.

Options, futures, commodities, equity, and foreign exchange trading involves substantial risk that all traders should fully understand before committing real capital to the markets through live trading.

With regard to any backtesting results I will present in this blog, please understand that no representation is being made that any account will or is likely to achieve profits or losses similar to those presented here.  For numerous reasons, actual trading results can differ substantially from those seen in backtesting.  Please understand that hypothetical backtesting performance results are generally prepared with the benefit of hindsight and without financial risk.  No backtesting record can completely account for the impact of financial risk on actual trading activity.  As an example, emotional pain due to intratrade drawdown often forces traders to deviate from their planned trading strategy.