Saturday, February 27, 2010

February Results - DD


I have to admit February hurt a little bit. A few things I need to point out from this months results:

1) The position in NFLX accounted for $1,772 of the total $3,179 or 55.7% of the loss. I did a post trade analysis, Click here to read. With my attempt to repair the position instead of just booking the loss I increased my max loss from $1,250 to $1,772. If I would had just exited the day after the earnings release I could had gotten out for about a $900 loss. This was me not wanting to admit I was wrong. I too much size to begin with, and my risk expectations were way out of line if you read my post analysis post. But I learned a lot from the trade, so it was not for nothing.

2) Another $1,021 was from my position in DRYS. I overplayed this name, and then I got stubborn. When it broke below $6 that should had been my sign to exit. I did not have a stop loss set and I take full responsibility for this trade, but I am not happy with my management of the position.

So as you can see two positions accounted for 88% of my total loss for the month. After evaluating these results I now realize that I need to set a maximum % of my total portfolio that I am willing to risk on any one position, as well as a maximum dollar amount. I am still thinking about what these limits will be but I will create another post when I decide with explanations.

March is a new month. 

Good Luck Trading!

1 comment:

  1. So let me give you my perspective on these results. Even after what you would consider a bad month not only for losing money but for making mistakes, your annualized pace is still extremely strong. I think four months is still early to be getting comfortable with prorating, but nonetheless the pace is still strong. You've learned from mistakes and realized you need to add something to your portfolio management protocol (max position size in terms of $ and %). If you can learn from mistakes while also making your game stronger, WHILE you stay profitable, this is in my opinion more than you can ask for. And the learning and getting better part is always going to be an ongoing game, there is no finish line. I love the results page and plan on backdating my trades to this sheet based off my 1099s when I make the time. I've had max position size in terms of % of portfolio on my list for a while, but can't commit to anything yet because I don't even have an overall portfolio strategy yet.