I traded profitably in 2013 in both of the accounts I used to trade. One is an account for short-term trading that I used throughout the entire year and the other is an account for longer-term trades that I funded and began using in July. In these accounts I traded the S&P e-mini (ES) exclusively. In the shorter-term account, the positions I had ranged from one contract to about three. Positions reached 4 contracts only a few times. In the longer-term account, the positions never exceeded two contracts. Both accounts were used to open short and long positions.
The short-term account saw 239 long contracts opened and 225 short contracts opened. 13 contracts were opened long and 21 were opened short in the longer-term account. This makes for a total of 252 long contracts opened and 246 short contracts opened.
The short-term account returned 188.5% or $14180.40 and the long-term account returned 87.0% or $8700.03. The return between both of them was 130.5% or 22880.43. These percentages are the values after commissions and fees.
Obviously a futures contract is a leveraged instrument in that the margin/performance bond requirement for a contract is much less than the actual value of the contract. One could say my return was luck or I took on too much risk. But when I traded, the positions I took on were within what I could handle emotionally. Because I only planned on trading a few contracts at a time, I did not put more money at risk than I need. So the account management was responsible.
Also I am obviously trading both sides of the market so there is a certain degree of protection every year from sell-offs and crashes. Actually the expectation is to be able to generate a profitable return every year, no matter what happens. But even in an up year like 2013, this protection did not seem to limit profits. If I decided to not protect myself and just hold one contract long the entire year, I would have generated a lesser return. So in a sense I "beat the market" in 2013.
But could the 2013 return have been luck? Nearly 500 contracts were opened between both of the accounts; 50.6% were long openings and 49.4% were short openings. This is a good amount of volume, and suggests something more happening than randomness. The long-term account saw 61.8% of its contracts opened short, a surprising number considering the account is designed for longer-term holds in a market that gained 29.6%, the best since 1997. So the counter-tend short positions must have been managed well.
Since it seems risk was well-managed and the return was more than luck, perhaps the most important thing to take away is that the Elliott wave principle can be used to generate positive returns. 95% of what I use is the wave principle. During the day I switch back and forth between blank charts of the e-mini and the S&P 500 with no labelings, markings, or technical indicators. In the evenings, I go over everything with a fine-tooth comb and create the charts you see in this blog. The research, done when my mind is clear of open positions fluctuating during the day, is something that I keep as a reference in my head during the trading day.
It takes more than good wave analysis to trade profitably however. Each day I believe I either have an edge but feel skeptical about it, or see no advantage, sometimes to the point that I cannot imagine making money again! It is this self-doubt that makes me hesitant to trade with only the single best option that I see. Much of my success is owed to this mindset.
Self-doubt, when excessive, can also be crippling. But not seeing possibilities and letting confidence get too high is far worse. For two episodes lasting a few months each, I was victim to these emotions. So I am hoping for better performance from myself in 2014 meaning that I want to maintain a good mindset. I would rather lose money knowing I did the best I can than be given money by luck.
I wish everyone a happy and prosperous 2014, whatever the market brings! Thank you for being such loyal readers of this blog of about four and a half years. I hope I have brought you something educational over the years.
Also I am obviously trading both sides of the market so there is a certain degree of protection every year from sell-offs and crashes. Actually the expectation is to be able to generate a profitable return every year, no matter what happens. But even in an up year like 2013, this protection did not seem to limit profits. If I decided to not protect myself and just hold one contract long the entire year, I would have generated a lesser return. So in a sense I "beat the market" in 2013.
But could the 2013 return have been luck? Nearly 500 contracts were opened between both of the accounts; 50.6% were long openings and 49.4% were short openings. This is a good amount of volume, and suggests something more happening than randomness. The long-term account saw 61.8% of its contracts opened short, a surprising number considering the account is designed for longer-term holds in a market that gained 29.6%, the best since 1997. So the counter-tend short positions must have been managed well.
Since it seems risk was well-managed and the return was more than luck, perhaps the most important thing to take away is that the Elliott wave principle can be used to generate positive returns. 95% of what I use is the wave principle. During the day I switch back and forth between blank charts of the e-mini and the S&P 500 with no labelings, markings, or technical indicators. In the evenings, I go over everything with a fine-tooth comb and create the charts you see in this blog. The research, done when my mind is clear of open positions fluctuating during the day, is something that I keep as a reference in my head during the trading day.
It takes more than good wave analysis to trade profitably however. Each day I believe I either have an edge but feel skeptical about it, or see no advantage, sometimes to the point that I cannot imagine making money again! It is this self-doubt that makes me hesitant to trade with only the single best option that I see. Much of my success is owed to this mindset.
Self-doubt, when excessive, can also be crippling. But not seeing possibilities and letting confidence get too high is far worse. For two episodes lasting a few months each, I was victim to these emotions. So I am hoping for better performance from myself in 2014 meaning that I want to maintain a good mindset. I would rather lose money knowing I did the best I can than be given money by luck.
I wish everyone a happy and prosperous 2014, whatever the market brings! Thank you for being such loyal readers of this blog of about four and a half years. I hope I have brought you something educational over the years.
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