In October, I had one of my worst trading performances. I underperformed the market by “earning” a negative 1.66% return while the market went up 2.22%.
That’s not good at all.
After my outperformance in September placed my cumulative return ahead of the S&P 500 index (the benchmark I’m using), my October underperformance sunk my cumulative return so it was lagging the index.
The question was how would I follow that up in November?
November Trading Summary
Here is my November Equity Summary directly from my TradeStation brokerage account:
I lost $36.05.
For a negative 0.12% return.
That’s essentially a breakeven month. Daily account fluctuations are greater than that.
By itself, a breakeven month doesn’t look good or bad. But as always, we need a market context in order to evaluate the trading performance.
In November, the market rose 2.81%.
That’s more than it went up in October!
At the midpoint of November, the S&P was slightly down for the month. This proved to be the low point as the market rallied hard going into and following the Thanksgiving holiday.
Look at the red line take off.
For me, that makes a combined underperformance of 2.93%. If there’s a silver lining, it’s that this underperformance is LESS than October’s 3.88%.
My cumulative performance dropped to 3.85% compared to 8.45% for the S&P.
My current performance is now on pace for an annual return of 12.55%, a drop from the 17.68% pace I was at last month. The drop is due to the elapsed month more than the tiny loss.
In a vacuum, any double digit return is still a fantastic yearly return. But when the benchmark’s pace is currently at an annual 27.53% return, it looks not so fantastic.
On an after-tax basis, I’m now lagging 12.94% behind the market. Ouch.
November Trade Detail
I entered November with no open positions from October. With the market being overbought, I was patiently waiting for a pullback before getting in.
This occurred in the middle of the month and I entered 5 positions on Nov 16th. This proved to be the best buying opportunity of the month as the market took off from there.
Just like last month where I entered a bunch of positions on Oct. 26th, I nailed the start of the rally — but my trades didn’t bear many fruits.
Besides the 5 positions entered on Nov. 16th, the other 4 trades were ones I would normally not have entered.
With my per-share commission plan (which is much better than the flat commission fee as an active trader), I have to trade 5,000 shares/month or get hit with a $99.95 fee.
For low activity months, this means I have to make some day trades at the end of the month to hit the threshold. This is the only reason I made these 4 trades.
I made a HUGE blunder with the SN trade where I didn’t sell immediately and in 5 minutes I lost more than I was trying to save.
There were multiple palms to the forehead involved.
In November, I had 2 winners, 2 losers, and 4 breakeven trades. That sounds pretty even except that both losers were bigger than the winners.
Overall, I still have more winners than losers and my average winner is bigger than my average loser. However, the past 2 months have seen both of these spreads narrow.
After a poor month of trading in October, I again underperformed in November. It was a pretty similar story to October with the market remaining at high levels and providing few attractive setups for my trading style that seeks value.
I spent most of my time on the sidelines waiting and the few plays I’ve made have not paid off. Eventually the market will have to correct and provide a new wave of buying opportunities. Right? RIGHT?