At last, trading to
plan pays off! I have
broken out of drawdown (whilst on
holiday, I hasten to add!)This
was a month I've been waiting for.
As can be seen from the 'Equity
Curve $100,000 Start' chart, the
Futurestech account made an
astonishing 1200 odd percent in the
first three years of reporting, but
then struggled to make much in the
way of further
headway for the last 15 months.
However, with this month's result of
some 7% the clock has been reset,
and I can (hopefully) relax a
little!
Although the drawdown was
lengthy, it was extremely shallow -
something that I am particularly
pleased about, considering the
earlier major gains.
I largely
attribute this to tight risk
management and, specifically, the
variable fractional position sizing
methodology (VFP) that I employ.
VFP increases or decreases the risk
taken for each system in proportion
to the realtime P/L for the
calendar month, thus allowing
increased leverage during profitably
months, without taking undue risks
with what I consider to be 'capital'
ie NAV booked at the end of the
previous month. VFP can
make a lot of money very quickly in
good trading conditions, while
limiting losses very quickly in bad.
However, there is always a price to
pay, and drawdowns can be
protracted. For those
interested, VFP is conceptually
described
here although I would add that
the parameters I now use are
different from that of the example.
Anyway, it's great to be on
top again!
