Tips From The Geek Recap: February Trading Provides Redemption!

Tips From The Geek Recapping February Trading

I can be honest, trading in December and January sucked really bad. In both of those months I barely broke even and at the worst of it, was really questioning my ability to trade. Well my friends, I can say now that my abilities are still sound, trading in those two months was hard due to market volatility and global financial turmoil. Results for February are in and guess what? I did pretty dam well if I do say so myself. Because of the leap year there were 5 Mondays in the month, 25 tips, and I won 20 of them. 20! That’s a win rate of 80%, well above my long running average and more than enough to redeem myself, in my own eyes anyway.


Total Cost Of Trading = $12,500

Total Return On Investment = $18,500

Net Return =+$6000 or 48% ROI


So, what happened in February that was so different from the previous two months? It comes down to trend. December was plagued by global financial turmoil and market sell-off, counter to the previous trend and driven primarily by headlines and fear. January was much the same; turmoil persisted, oil prices were volatile, S&P 500 earnings were piss poor, outlook took a hit and FOMC fears were mounting. In February many of the fears evaporated, volatility declined and the market was able to return to trend. Since the weekly tips are based on fundamentals as much as technicals the return to trending from volatility was a great thing. I can’t control volatility, it comes when it comes, but I can control my trading and stick to my guns. If there is one rule I can leave you guys with it is that; develop a strategy, make an analysis and stick to it. Don’t second guess yourself and don’t chase the market, you will lose.



What Happened In February?

Basically a lot of the fears driving the market evaporated. Chinese markets calmed down, oil prices hit bottom, gold prices reversed, US economic data was in the sweet spot and the FOMC meeting was over a month away. All these factors allowed the market to focus on fundamentals and future outlook for earnings. Earnings are still expected to be weak in the next reporting season but with oil prices 50% above their low and gold prices hitting more than 1 year highs and labor data trending stronger the outlook for the end of the year is very optimistic. We may see a retest of support as the next earnings season unfolds but once that is done the US market should enter full rally mode into the end of the year and beyond. I began doing a lot of short term trading in February, on top of my weekly tips. I have been focusing on the 1 minute charts and using 2 to 5 minute expiry, with the best results in the 2 minute expiry. My success has been good, I’m averaging better than 63% and have increased my ranking on the leaderboard in the 30 days and 12 months to 7th and 8th place as of my last look. Be on the lookout for more of this type of trading from me in the weeks and months to come.


Week 1 2/1/2016

This is the week that market began to bounce from the January bottom. It is not the first week the market hit bottom but it is the first week we can say a reversal was building with the possibility of a new up trend. It was also a week of monthly macro data that frankly, was not that great but put rate hikes far from the markets mind and allowed rising oil prices and gold prices to help support the broader market. This was an OK week for me, I won 3 out of the 5 trades, but the important thing is that I was able to regain my footing in terms of where the market was heading and what I was going to be doing the rest of the month.


Week 2 – 2/8/2016

This week was the week that the US market, and the global market, really began to rally. The one worry I had this week was the mass closings in Asia due to Chinese Lunar New Year but in the end, that was nothing to worry about. In terms of my trading, I won all 5 trades this week. . . I think that says it all.


Week 3 – 2/15/2016

This was the week that the minutes from the January FOMC came out, and weakened the dollar. Weakening dollar helped to support commodities across the board, rising commodities supported their respective sectors, namely oil and gold, and that, along steady economic growth helped to drive the US stock market higher. I lost only one trade this week, on the yen, but that was due to a surprise flight to safety into that currency driven by some renewed uncertainty in China.


Week 4 – 2/22/2016

This is the week that rumors of a possible Russia/OPEC deal to curb oil production hit their peak. The news, rumor, helped to drive oil prices up to at least a one month high and to eventually break out, leading the entire equity market with it. I won 4 of my 5 trades this week too, only losing out on the eur/usd which strengthened on US data and Fed outlook.


Week 5 – 2/29/2016

This was an extra Monday for us, thanks to Leap Year. I made my regular 5 tips and won 3 of them, not my best week but you can’t win them all. I lost out on both my currency trades but won on the S&P 500, gold and oil.


If you want to follow my tips each week, find out more about me and my trading you can find me in the forums, at Tips From The Geek.