The Geek’s Recap Of July Trading – Trade Small, Trade A Lot
July was a month in which my principal of trade small, trade a lot really came to shine. It’s not that I made so many trades, it’s because once again my picks for the month were not as good as some months but my mix of closed trades for the month was profitable. Honestly, only 8 of 20 tips for the month have closed in the green with 4 still open as I write this. However, on a closing basis, 13 of my trades closed in the money for win/loss ratio of 65%, fully 10% above the industry average for profitability. This is only 3% below last month and in line with my current three month average. On a year to date and all time basis I am in the range of 59-61%, depending on recent closed trades. What I really care about though is my ROI, which is 20.25%, way better than savings, money markets, CD’s and the market in general. OK, I have already mentioned there were 20 tips in the month, 4 Mondays equals 20 tips. There were also 20 closed trades and a handful of bonus trades.
July was another tough for traders. The economic trends were up, the earnings trends were up and the market trend was up until geopolitical events led to a correction. Not only that it was earnings season. Earnings began with the first week of the month and while better than expected were still not enough to overcome near term fears driven by Ukraine/Russia and ISIS. Adding to the downward pressure were high expectations for economic data that were unmet. The data was still positive, still trending higher, just not as good as expected and led to additional near term bearish pressure. Needless to say my bullish positions on the SPX, DAX and other equities were not my best trades this month. On the flip side, oil and gold were both impacted by fear trades and led me to some good, and profitable, entries.
Total Cost Of Trading 20 Trades X $200 = $4000
Total Return On Investment 13 Trades ITM X $370 = $4810
Net Profit = $810 (20.25% ROI)
Recap Of July Trading
July was not that active a month compared to some others. The mix of calendar dates and types of trades in the pipeline led to only 20 tips and 20 closed trades. I also made a few bonus trades that ended up 60% ITM. This was probably a good thing as the market corrected towards the end of the month. Another good thing is that due to so much going on in the marketplace, well, in the world and affecting the marketplace, I was unsure of some expiries and opted for the one month time frame. This is why there were 9 open trades at the end of the month and 4 of those trades still open now. There is still a chance for some of those trades to move into the money but I am not holding my breath, just moving on to the next signal like always.
Week One – Earnings Ho!
This was the first week of earnings, led off by Alcoa and Wells Fargo. Between the two one was a beat and the other in line, leaving the market a little confused going into the weekend. At this time long term trends were still in charge, it was another week or more before geopolitics provided enough resistance to halt the market. This week I made 3 weekly trades, all ITM, and 2 monthly trades, both still open and in question. Gold, USO and JP Morgan all paid off while my calls on the SPX and the DAX remain open.
Week Two – Banks On Tap
This week the banks reported earnings. There was nothing stellar to take note of but they all beat the estimates, more or less. This week there was also a little Fed speak and inflationary data that helped Gold prices fall hard and put several of my open trades in the money. Weekly calls on the SPX and JPM paid off, while positions on Gold, the DAX and the Yen did not.
Week Three – The Shot Heard Round The Market
This is the week that the Malaysian airliner was shot down by Ukraine separatists. This, along with some other negatives, helped to send the market screaming for cover and put a real hurting on my trades for the week. A weekly put on USO did not pay, a weekly call on XOM did. Monthly positions on the SPX and DAX are still open, OTM, while a put on gold is firmly in the money at this time.
Week Four – Heavy Duty Week
This was a week of massive fundamental data, earnings, central bank meetings and all overshadowed by geopolitical concerns. It was also the end of the month which means macro data, and of course all of these trades were still open at the close of the month. They were all weekly expiry and have closed. Of course they closed in the next month but I’ll let you know that four failed to fruit. My only profitable trade that week was a put on gold.