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Tuesday, August 12, 2008

What Questions Should You Be Asking During a Period of Drawdown?

Challenge Accounts:

Investing Account Balance:
$332.73
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39

Personal Trading Thoughts: In my personal accounts, I'm still within the CRBC trade. It's worked out really well, and just continuing to monitor this swing trade ...

Personal Investing Thoughts: Overall, I'm just watching and waiting. Summer is here, and the market is generally weaker in the summer, so I'm not a buyer. Many years, I turn my DRIP off in the summer, and receive straight cash. But not this summer. We've been in a bear market, and the market is offering bargain prices on many stocks. Therefore, my DRIP will remain on, so that I can accumulate more shares at better prices to DCA
.


Let's say you have a couple of losing trades. You go into a period of drawdown. What sort of questions should you be asking yourself? I discuss that in the following video ...



Tomorrow, I'm going to discuss yet another reason for the Challenge Project. I'm going to discuss my own economic background ...

* * *

Investing Account Balance: $332.73
Stock / Futures Trading Balance: $954.13
Online Savings Balance: $47.39


Total Trades: 6
Largest Inter-trade Drawdown: $86.51
Consecutive Losing Trades (Drawdown): 2
Average Drawdown: $56.63
Average Loss: $74.27
Accuracy Rate: 33%
Average Reward: $175.34
Risk : Reward Ratio: 1 : 2.1
Trading Money Gain / (Loss): Up + $53.84

This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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