Monthly Report for May 2008 +5.2% / +$24,268
I feel really good about May. Not so much my trading results but the path that I took to get there, the results from my fellow trade team members, and the health and breadth of InsaneMoney.com .
At the end of April I increased my available capital by $250K. In the past each time I stepped in capital I’ve completely screwed up my account by incurring losses on the larger capital that overrides anything I made before. Out of this experience I created a new rule for position sizing that my capital available doesn’t go up (for sizing purposes) until after I’ve completed that month’s expiration.
We added a few new members to our trading team and the new energy and perspective has been fantastic!
Trade Record
35 trades, 29 wins, 6 losses = 4-to-1 win / loss ratio
avg $ per win: +1,142 avg $ per loss: -1,480
avg % per win: +16.0% avg % per loss: -12.9%
Excellent win / loss ratio. I could use a little more capital on my winners and a little less capital on my losers. All of these trades came from our trade team. I missed another 7 wins and 1 loss that several members took because I was out of town or tied up at work. Really, really good work.
It was funny, I got caught up in a debate in a Yahoo group about how its impossible to make better than 15% a year. Everyone had sides and opinions. All I had was my track record and personal knowledge of another 20 traders making better than 36% a year over a multi-year basis. Finally, I just gave up. No sense showing anyone the light if they are squinting that hard.
One of my highlights from the month included a weekend at an Investools event where I got to see a lot of other great Investools folks (Katie, Frank, Debbie, Jerrod, and Tom) and meet Dave Johnson. One word… WOW!
Update on Goals for 2008
Health - I broke my record of no colds or flu and came down with Ebola Zaire for a day. NOT pleasant! Weight and fitness need help, wrists are doing better with my carpal braces (and look good to boot!).
Give $25,000 to charity - We have given away $8,000 given so far this year.
Produce $250,000 in personal income (outside of my business and retirement) - On target and soon to exceed our target.
Pay off $125,000 of personal debt - So far we have paid down $42,000 in personal debt.
Study for and receive my Series 65 (Investment Advisor) license - Fail. I know, I know I have to stop trading long enough to get my license. Sheez!!
Insanemoney.com - Is completely rockin and thriving with little input from me. The forums section ( http://www.insanemoney.com/forums/ ) is alive and kicking with over 190 members and lots of great traders. We have staged a new server and will likely make our final (hopefully) move in the next couple of weeks.
Raise $1,000,000 of investor funds - Haven’t started yet. I need to complete my license first.
Make 3% a month in options - Check. I’m thinking about moving this up to 5% a month.
Lessons learned:
1) Iron Condors in the RUT (low prob and high prob) did well. Had I not made a mistake in putting on the low prob and accidently closing my short put position I would have had another winner and a few thousand dollars more of return.
2) Calendars did well for us with the exception of EEM. EEM vols dropped 25% quickly. IV is low and price is trending slightly so its a good time for more calendars.
3) G$ (one of our better traders) has been using a lot of long butterflies to capture vol crushes post earnings. His returns are killing it and very consistent.
4) I didn’t do a lot for delta management on these trades. I’m expecting to do more as we are trending more strongly now. When I do mitigate my deltas I will take smaller adjustments more often. Likely not cutting my deltas more than 50% at a time in case the price reverses.
Plans for June
I would love for everyone to “sell in May and go away”. But I don’t think that’s going to happen. I’ve been working with several folks on producing some daily income on futures (YM) and sharpening my technical analysis. Very cool. Also, since meeting with Dave Johnson I been doing more long call positions on technical setups and making some strong returns. He makes it look easy!
All the best,
Mojo
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Dawn