01 Jan Swing Trading Review of 2013
This year has been particularly busy outside of trading and thus I apologise for the lack of updates most regular readers expect throughout the Year. Another result of this has been the lack of trades I’ve been able to take. There used to be a time where I’d flick open the charts and find a fair number of set-ups ready to trade but this year that simply hasn’t happened and I don’t know if its down to me not being in touch with the markets enough to recognise various trading set-ups or whether it really was a difficult year to find and trade high probability moves. Of course, its much easier in hindsight where a simple long on the DOW on 2nd January 2013 would have delivered more points than I made across all 2012 swing trades combined!
Throughout 2012 I made a total gain of 3220 points across 46 trades with 76% of all trades taken being profitable and an average 4.6 points profit gained for every 1 point lost over the course of 2012.
In 2013 I made a total gain of 1761 points across 21 trades with 81% of all trades taken being profitable and an average 3.5 points profit gained for every 1 point loss over the course of 2013
So 2013 has the higher percentage of winning trades but less points made against each point lost suggesting 2012 was the better year.
This clearly demonstrates the percentage of winning trades despite being higher in 2013 doesn’t mean a larger overall profit, in fact I guess it wouldn’t matter if 90% of trades ended in a loss, its the number of points lost vs the number of points won that matters.
Like 2012 most of the trading calls I made were spot on, the problem being my ability to hold those trades for long enough to really benefit from them. Here are some examples of fantastic trading calls where I became jittery and exited perfectly good trades, and these were quite painful to watch:
This chart was the original call:
I entered the trade with a short position and held it for 2 Weeks before eventually accepting my plan just wasn’t working.
That’s when the move I’d anticipated suddenly started, leaving me frustrated (polite word) that I’d taken a 32 pip profit but could have held on for over 3000 pips!
This one was even more frustrating. The initial set-up was as follows with a break-out from its 3 year range followed by a brief and well supported back test:
I entered a long position and held it for around 1 Week, then suddenly a massive 300+ pip sell off came from nowhere in a matter of hours. With such heavy selling I’d taken the view the break-out must surely have been a fake move, so I headed for the exits, only to find myself frustrated again when the real move ensued, leaving yet another potential 1200 pips profit wasted:
All that said, there was one star trade of 2013 and that has to be the DAX swing long. I’m happy with the entry and exit conditions used for this trade but even still it now trades much higher than where I exited although I don’t think anybody can deny the fact it was a good trade:
All in all 2013 ends with a profit of 1761 pips and assuming an average theoretical trade size of £2 per point this gives an annual profit of around £3522. Ok, so its half that of 2012 but also less than half the number of trades were taken and much less than half the amount of time was spent analysing potential swing trades compared to 2012, so despite it being a below average year, the “hourly rate of pay” was actually higher than 2012.
Going forwards I really do hope to spend more time swing trading in 2014. The whole point of the inception of this blog was to remove my focus from labour intensive day trading to swing trading yet I found myself doing a fair amount of day trading in 2013 which to be honest didn’t deliver a great deal of profit for the time spent doing it. In 2014 I therefore propose to cut back on day trading again and focus my efforts onto more good quality swing moves. If we do see a trendless year that’s full of chop then I may have to go back on that proposal but for now lets wait and see.
In the meantime I hope you all have a very profitable 2014.