'Workin' In the Coal Mine'

Just a quick update on the performance of the GOAL Forex fund.

I started trading live for the GOAL Forex managed funds in December 2009 and moved up a nice and easy 7% in our first month. Then I basically stopped trading in the second month in order to wind my life and responsibilities down. As February began we had just gotten trained and set up with our new trading software... when one day later the GBP/USD pulled its first major (black) swan dive in a long time, down over 400 pips in one day. Who says the Forex doesn't have a great sense of humor? Good thing I keep plenty of smelling salts on hand at all times.

By (literally) staying at my screens all day and half the night for a few nights in a row, I managed to pull out of that inverted high-G roll with minimal damage. That actually made me pretty happy. If I could recover from that, I could recover from anything. But it had pulled us back down to just under where we had started, so I basically started all over again.

A few weeks later and I'm happy to say things are looking really good again. I'm still trading at very low leverage (over the past week the maximum draw down has been 1.4% which is minuscule) and currently averaging about .4% per day, or about 8% per month as I continue to gain experience with the software.

The alert among you might ask, heck, with draw downs that low, why don't you goose things a little, get ROI up to, say, 15% a month and you'd still keep draw downs under 3% which is still chicken feed.

Not so fast. Sounds great on paper, but capital preservation is my first and foremost objective. As it is, we're currently closing between 40-70 trades a day (you read that right), netting around 500 pips a day (not a typo), but position sizes are very small... just in case that swan comes around again.

I've discovered that flying this software is a little like flying a vintage F-104 Tomcat with twitchy afterburners. I just want to keep here in a nice, steady climb. No inverted snap rolls quite yet.

So altogether, I'm very pleased. Down the road another month or two GOAL may offer two different managed funds, each targeting different levels of performance (with matching risk and volatility). In order to attract investment money from main street clients still suffering post traumatic stress disorder from the stock market's 2008 high wire act, we may go for just 2%-3% a month in one fund (24%-36% a year which won't cause Grandma gastritis), and 10%-15% a month in a second fund for those who may need an air bag with their seat belt.

That way, the discriminating client can put a little in here, a little in there, and get some diversification with their performance.

I'll be posting frequently from now on, so I'll sign off here and go make sure Klatu's nuts are nice and tight. More on Klatu later. Back soon...