May has been a fine month - but before i start on that i want to remind you of a story you once read as a child.
| "Nah nah nah boo boo, I'm faster than you!“ shouted Harriet Hare as she sped down the road. Normally, Timothy Tortoise was a very easy going reptile. He was happy roaming through the forest at his own pace. But the nasty taunts of Harriet Hare were starting to make him angry. Later that day Timothy finally arrived (last as usual) at the playground by the river. Sure enough, as soon as he arrived, Harriet started teasing him again.
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| “A heavy green shell and short little feet, you’re the slowest guy I ever did meet!”, Harriet taunted. Timothy slowly turned his head to look Harriet straight in the eye, “I am too slow or so you say. To find the truth, let’s race today!” All the animals in the playground gasped. A race? Between Harriet Hare, the fastest runner and Timothy Turtle the last to show up? What an odd thing that would be to watch. “I’ll set up a course for you to race on”, offered Freddy the Fox. Harriet Hare laughed out loud, “A race you want? A race you’ll see. I know I’m faster than Timothy!” And so Freddy the Fox set up a race course all the way from the playground by the river to the big oak tree at the edge of the forest. All of the animals met at the starting line early in the afternoon. “On your mark…” shouted Freddy. “Just a minute Freddy,” giggled Beatrice the Bear, “um, Timothy hasn’t quite made it to the starting line yet.” “I’m fine,” smiled Timothy, “I always make it to where I’m headed.” “Get set… Go!” chanted the animals all together. Harriet Hare was off like a shot. She made it around the corner by the meadow before Timothy even had all of his feet across the starting line. Freddy the Fox groaned and shook his head. He'd been hoping his friend Timothy would somehow manage to beat Harriet -- she was always such a show off. "Oh well, let's head over to the finish line everyone. If we cut across the meadow maybe we'll manage to get there in time to watch Harriet cross the finish line." Off the animals went, leaving Timothy to slowly make his way down the path Freddy had set as the race course. Meanwhile, Harriet had run so fast that she could actually see the finish line already. She had to sit down, she was laughing so hard, "I can't believe the nerve of him, to think that he might actually win!" Harriet gazed over to the finish line and realized that none of the spectators were there yet. "Perhaps I'll rest underneath this tree, so when I win the crowds will see. After all that turtle's slow, he'll take all day to catch up I know." Harriet lay down and promptly fell asleep. Timothy made his way down the path along the river, across the meadow and right past the snoozing Harriet. He didn't stop and rest anywhere along the race track. As Timothy approached the finish line all of the animals began to cheer. Harriet awoke from her nap and ran as fast as she could, but she was too late. Timothy picked his last foot up across the line an instant before she made it there. Harriet pulled her ears and stomped her feet, "No fair, no fair, no fair, I say! I am the fastest any day." Timothy smiled and nodded slowly, "It's true I have a slower pace, but slow but steady wins the race!" |
Ok, indulge me :) you will see from this months results weve done quite well, the figures you wont see yet are that so far from inception the account has grown 342% and at one point this month it was over 400%!
Now there are traders out there scratching their head and panicking all day trying to squeeze every pip they can out of the market - they won't give up and have sleepless nights whilst the hare in their head says "keep going!!" they burn themselves out and never actually get anywhere apart from in a big hole.
Now this is the bit that may suprise you. I am a tortoise.
This bit will really suprise you ......
The results that you are seeing with this account - and you have to admit they are pretty good arent they!, the results you see are the result of ...........
yep, believe it or not .........
they are the result of just 9 pips a day
Think about that for a moment
Just an average of 9 pips a day is going to make me super rich. The hare's of this world will be laughing at this - they are soo fast and soo good that they think 20 -40 pips a day is easily attainable. They are soo clever that they will piss all over my 9 pips a day.
Well, ask yourself why they arent millionaires then?
so endeth the lesson :)
Onto this months results and action.
May was a stupendous month, remember last month when i said that if we hit 40k then stage 2 of the plan comes into action? - well we didn't just hit 40k we hit 50k! - at one point our accounts were up over 65% ON THE MONTH!
So technically the reason for this sudden volatility during April and may was that gbp broke out of a range that it had been in for over six months - that was bound to produce fireworks - good news for us but i'm sure a lot of people got burned.
I guess that you are wondering what this stage 2 is all about. At all times we know that 25% of the account is safe money. when we hit 40k we knew that 10k of the account (our initial stake) was safe and i dont like safe money sitting there doing nothing.
so, 10k was taken out of the account and placed into a new account - the 'income account'.
We have been running the income account since january this year and the idea is that whilst grail is going to build and build to a big pot, in the meantime we need an income to live off. so was born the income account.
The income account trades grail in exactly the same way as the main account with the exception that it is played without compounding at a constant leverage.
The basic idea is that for each £5 per pip you trade makes you £1000 per month. We play the income account at high leverage. we started off with 10k of our own money and at £20 a pip - so a 4k take every month.
Our testing showed that once a year at this level we would have to put money in as the drawdowns would bust the account but we took the risk that we would get good money out before this happened - we were right and to date we have taken out 20k from a 10k account.
Anyway, when the 10k from the grail account became free we decided to add it to our income account and reduce the leverage to a safe level where the account will not bust.
so you will see from the account screenshots below that there has been 10k taken out to make yet more money. so dont forget that in the future when you see the account. There is now 20k in the income account which is played at 15:1 (£30 a pip) and gives us £6k per month on average.
The figures from the income account will be tagged onto the end of the grail account on a quarterley basis but they do not form part of the million pound target.
So, how was the month emotionally? to be honest from sweet inspiration to desperate despair.
this month the staking plan meant that our stake increased substantially and to be honest we didnt have time to get used to it. it took us 6 months to increase our stakes threefold and then suddenly within 3 weeks it had increased a further twofold.
during the first six months the growth was slow and steady - each increase in the stake was easily assimulated and by the next increase we were well used to the previous one.
This month our stakes increased in large jumps and our minds did not have time to get used to the jump - what previously felt like a safe stake suddenly seemed very high and of course like all traders we started to sweat the action and have 'scared money'
particularly when you add in the stake from the income account - at one point we were the equivalent of 16 full dollar lots in the market and at the beginning of the month this was just 9 - the jump was rather fast eh?
when we did eventually get into a drawdown which was bound to happen, after 4 days i was really starting to sweat and as day five started into negative territory i was looking for the gas oven to stick my head in. - instead i just took a look at the account and noted that even if it had failed that day (which thankfully it didnt) the account would still have been 20% up on the month. that settled the fears and the day actually finished up, as did the next. phew!
You may remember last month we were talking about Capital Spreads, well our curiosity got the better ois us and we thought we should do some due dilligence on the company that we were going to take 1 million from.
We paid for a Dunn & Bradstreet report on the company London Capital Group Ltd.
The report said that the company was very safe and had little chance of failing - however on reading the P&L for the company we took a decision that it just is not big enough for us to trust our hard earned to as next year our projections show that we will take more from them than they have earned in the last 3 years.
This, on top of conversations i've had with the MD has caused us to look elsewhere for a place to put our money.
This is a shame really - Cap spreads platform lends itself easily to our system, they are mostly fair with entries and as a whole I like doing business with them, but other things also came into our thought like this ...
During one conversation we had with them it became apparent that once we reach £300 per pip it could cause them problems with execution - now bear in mind that there are three of us playing this system with them and with 2 accounts each and you start to see what i mean. - combined at the end of the month we were at £267 per pip and by this time next year we will each be at around £400 per pip.
Capital spreads is a great company but i don't think they are big enough to handle 3 players at that sort of level.
One thing that does bug me is that before we even went on cap spreads you may remember at the start of this blog that i spoke to them about the levels we would be playing and was told we were fine to go ahead. obviously the guy we spoke to thought that we were yet another bunch of suckers who were going to lose.
I dont blame him for thinking that because most are, but it does bug me that i was open and straight with the guy about how much we would be staking and everything was rosy unti we actually start to reach that level.
Anyway, here's what we have decided to do.
Having done some more due dilligence, in april I decided to fund my A.Nother broker account and see how the platform handles our system. Its a bit more work but handled it ok.
It handled April and May ok so at the end of april we emptied our income account on cap spreads funded A.Nother broker to see how it handles £30 a pip.
So far so good but we are going to play it for a good month first before we think of transferring over the main account.
Its important to say that we are not ditching cap spreads totally. the main account is still over there but what we will do is switch the main account over to income and the income account at A.Nother into the main account - so dont be suprised if there is some messing around with the screenshots in the coming months.
We will keep the income account at cap spreads basically until they tell us to sod off, which I dont think they will on that level.
anyway, time for the figures then, have fun, back next month.
- Closing Balance: £34,491
- Holding Account £10,000
- Real Closing Balance £44,491
- P/L: £14,094
- % Gain on account: 46.4%
- Lowest account value: £ 30397
- Highest account value: £50,242
- Maximum Drawdown: £13,568 = 27%% peak to valley
Back to trading metaphors now ... The new Rocky film has a great scene where balboa is telling his son what makes a winner. Something along the lines of "it aint how hard you can hit - it's how hard a hit you can take and still remain moving forward" - well, never a truer word was spoken.
