My view of trading is always that a successful trading system must have a good risk management system, a good entry procedure, and the opportunity for big winners to occur. Within that, your entry points have to be good enough that you win between 50 and 60 percent of your trades at a minimum. We don’t try to build a single day, week, or even month. We try to put together a successful year. At Tradesight, we do that in all asset classes (Stocks, Futures, and Forex), and we increase our size in each market based on the environment.

2013 was not a very exciting year for volume and range in the stock markets, and thus the futures trading was not as robust as we have seen in the past, and I commented on this a few times during the year in articles recommending that futures trading be kept to smaller size until the volume picked up. On average, this was the lightest volume in the markets in almost two decades, and that means that the indices aren’t moving much. The futures lead by reflect the indices. We did close out the year with 5 out of 6 months of net gains, but we had a couple of months in the first half of the year where ranges were so poor, the futures market was just a dead end. May in particular was a killer for futures, costing us 76 ticks. We made fewer calls than normal this year.

Our monthly results reflect only our main calls that we make, which is basically the 1 or 2 best setups that we see each day on the major futures contracts based on the stuff that we teach in our courses. I always expect to have a couple of negative months, but we had 4 this year, and the combination of April and May really slowed the year down if you didn’t lower your size. My concentration was definitely on stocks with Forex as the second area, but we still track raw results. These do not include Value Area plays, which still managed to work great, and Seeker/Comber signals, which were actually quite awesome when they occurred. I remember one week in the summer where we had 5 days in a row with Comber 13 sell signals on the 5-minute ES, and it was the high of the day each time.

In terms of raw trades, we called 305 trades that triggered in 2013. 175 of those worked, which puts us into our 50-60 percent success range at 57.3%. However, without range, the number of trades that followed through was much lower than normal, so even though we didn’t lose more than we would like, there were less big winners. Usually, you’d like to see around 33% losers (with tight stops), 33% small winners, and 33% that make the big money and put you ahead. I would say we had less than 20% of that last category. Net gains for the year add up to 41.5 ticks, although in the second half, it was more like 134 ticks. If volume continues to expand, I expect to make more official calls in 2014, and while I don’t need the win ratio to change much, the big difference would be seen if more plays carried forward.

For those that trade futures exclusively, you could certainly have done well playing with the Seeker/Comber lined up against levels as we teach and using the Value Areas, but waiting for that on a couple of symbols is less interesting to me unless I happen to be there when it happens than just trading stocks, which worked great. Let’s hope the light volume and narrow ranges are behind us.

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