For me, 2014 was all about one of the crossroads we come to in life. A fork in the road where we decide to go one way, or the other. And in deciding which path to take it’s one of those decisions that will most likely affect us for the rest of our lives. In February I began trading the financial markets in earnest after leaving my full time job.
I decided to trade to create a home based business that would hopefully generate some income and grow capital. I’ve wanted to trade for a very long time, so that I could be free and live a lifestyle of my choosing. After years of work my dreams are finally starting to come true:
- To live and work anywhere in the world
- Spend time on the things I love to do
- Answer to no one, but myself
Results for the year were great, as shown in the table below. Moving forwards into 2015 these results have really boosted my confidence. Trading is mentally and psychologically one of the toughest things you can do, and you never want to become overconfident. However beginning to establish a track record of success is a real boost.
Net profit was 26.8% for the 11 months of trading from February to December, with some significant lessons learned so far.
Returns were volatile during the year with a draw-down occurring in April due to some currency hedging I decided to do. The hedge went against me so it was really a secondary effect that caused this loss. I’m now operating the account with no hedge, in a manner that removes currency risk from my P&L in base currency.
The 3 months from August to October were all losing months which was very tough psychologically. September was a shocking month with a -11.3% loss.
As a result of the large loss in September I refined the trading strategy so that it’s now less likely such a large loss will occur in the future. However there are no guarantees in trading, the best we can do is balance risk vs reward in a manner that suits our trading style. Nothing is certain, and in times of decision we can only work with probabilities, and what we know at that moment in time
I think that trading is about learning and continuous improvement. I’m hoping for a better result in 2015 after some refinements to the original plan. So far it looks like we’re on track.
What a privilege it is to be able to do this and have it as part of my life. I’m grateful every morning when I wake up, I love it.