The general market moved up in May because there was no surprising bad news. The shorts that needed to cover their positions and the long pent-up bulls all pushed the market higher. The stock market is all about speculation or anticipation.
I did OK in May too. If we look at the absolute value (+3612.52) of my gains from May 2009, it is not a big deal. However here are 2 things I am very happy with
1: There were very little draw-downs in my equity curve because there were very few losing days.
2: The reason that I have made $3612 is because I traded very small positions. Percentage wise, it is actually not bad at all.
S&P 500 Weekly (courtesy of ThinkorSwim)
Click on the image to have a better view
For me, maintaining a steady rising equity curve is far more important than anything else. If all you do every day is like walking into a casino, then you will never make it as a trader. You need to make your income predictable. In March 2009, I made 7000+ due to a single huge winner (+8000) in FAZ. If we looked back at it, it was just an outlier. It perhaps really did not have anything to do with my skills. It was just pure luck. Without that winner, March could have been a losing month. I was not happy with that kind of performance at all since I do not really know why I made money in March.
Nevertheless, my performance in May is decent because it is predictable. I am satisfied with the results. Here is how I did it
1: Focus on executions
2: Keep positions small
3: Be realistic about the stock market
4: Respect risk.
I hope you did well too. Since I started to post my trades real time in Dec 2008, I have been up every single month. And I will keep it that way.
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