While 2012 was a great trading year for me with a +53% return on my trading account, but it should have been much better. My equity peak was a +75.3% return and I spent most of the year churning with around a 60% return. My biggest faults were being to aggressive with position sizing and trailing stops tight enough or rolling in the money options quickly enough. I did a great with taking every entry that had an edge based on my systems and following the majority of trends. (My inability to forget fundamentals and trend trade Apple to the downside cost me what could have been a 100% return this year.) My biggest winners were AAPL from $392-$700 trading the long side in and out, PCLN Long in the first quarter, Groupon short, and Goog long in the second half of the year. My late year AAPL strangles also paid off dramatically. But I am putting all that behind me and starting fresh in 2013.
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I will continue to get myself out of the way of understanding charts. My opinion is meaningless all that matters is what the chart is saying.
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I will be quick to roll profitable in the money option profits into my account and buy new ones that expose less capital to risk.
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I have learned I can not be a trend trader in every market environment, these past few years have been brutal on many trend following systems. I will trade the market I am in based on price action I will trend trade trending markets and strangle volatile markets with options.
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While my intent is to never lose more than 1% of trading capital on any one trade I had several this year that were 2% or even more due to a sudden whipsaw or volatility spikes. This effected my overall returns. In 2012 I will decrease position sizing and anticipate worse case scenarios better.
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I will focus like a laser on only a few names that I know inside and out, I will not trade things that I have not studied price action on deeply.
