Before we get to January’s numbers, here is a short reminder of the results from December. The full report can be found here.

Number of trades: 34
Number of losers: 18
Winning percentage: 47.0%
Worst losing streak: 4 in a row (Dec 26-28)
Net pips: +315

Reminder: Here are the rules.

1) Calls made in the calendar month count. In other words, a call made on August 31 that triggered the morning of September 1 is not part of September. Calls made on Thursday, September 30 that triggered between then and the morning of October 1 ARE part of September.

2) Trades that triggered before 8 pm EST / 5 pm PST (i.e. pre Asia) and NEVER gave you a chance to re-enter are NOT counted. Everything else is counted equally.

3) All trades are broken into two pieces, with the assumption that one half is sold at the first target and one half is sold at the final exit. These are then averaged. So if we made 40 pips on one half and 60 on the second, that’s a 50-pip winner. If we made 40 pips on one half, never adjusted our stop, and the second half stopped for the 25 pip loser, then that’s a 7 pip winner (15 divided by 2 is 7.5, and I rounded down).

4) Pure losers (trades that just stop out) are considered 25 pip losers. In some cases, this can be a few more or a few less, but it should average right in there, so instead of making it complicated, I count them as 25 pips.

5) Trade re-entries are valid if a trade stops except between 3 am EST and 9 am EST (when I’m sleeping). So in other words, even if you are awake in those hours and you could have re-entered, I’m only counting things that I would have done. This is important because otherwise the implication is that you need to be awake 24/6. Triggers that occur right on the Big Three news announcements each month don’t count as you shouldn’t have orders in that close at that time.

You can go through the reports and compare the breakdown that I give as each trade is reviewed.

Tradesight Pip Results for January 2011

Number of trades: 35
Number of losers: 23
Winning percentage: 34.3%
Worst losing streak: 8 in a row (January 6-14)
Net pips: -40

2011 starts off with our first negative month in almost three years. On the surface, the first part of the month should have been better than the second part, but that’s not how it worked. We had a couple of unlucky stop outs that barely happened early that would have improved the month, and we managed to catch three nice moves in the last eight days to bring things back a bit (including 50-, 20-, and 70-pip winners to close out the month in the last three days). We also had a near record 8 losers in a row, which is really where the problem area was. Ranges didn’t move much, although a couple of days late in the month brought the averages back up. GBPUSD was 151 pips per day heading into January on average over the last six months and 150 after January. EURUSD was about the same.

Still, from time to time, you have to expect a series like this. What’s clear is that the month ended up being barely negative in the end despite a 2-to-1 losers-to-winners ratio. That’s critical. You system, as we teach, always needs to focus on keep losses small even when you go through a string of them so that a few winners can bring you back quickly. It’s a disappointing start to the year, and the activity in general did surprise me given that there should be a lot going on in the world, but after making 512, 218, and 308 pips respectively each of the last three months, things are still working fine. It’s important to focus on what we teach, which is that a system isn’t based on trying something for a couple of weeks. We’re trading to put together a year of results. Sometimes, that gets a little tough for newer trades to focus on, but think about the risk management numbers that we cover in the course and I think that will make more sense now.

On to February…

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