Coming into the end of December we were actually well positioned for the decline that came in the first two weeks of January. The only problem was that we closed out all our short positions the last day of December mostly to pad the month and our first year. (Feed the Ego) We closed 300 of SDS, 300 Short BA, and 100 Short GS all on the 31^st. Thinking that the first week of the New Year would be slow and uneventful I did not have a problem closing the positions. We also had both been planning on being out of town the second week of January on a trip to Texas and did not plan on having any positions on during our week off. Had that happened we would have avoided about 65% of our monthly losses which came during the second week of January. But, it just so happened, that Ainkurn’s wife had gotten sick and had to have surgery preventing him from taking the trip.

Positions were left on in MA and SPWR that no doubt came second to tending to his wife. The market got crushed along with our long positions and we lost about $5,800 on these two positions alone. We did let MA get away from us as our stop should have been closer than $195 and $192 with our average entry around $215. We intended to stay in the position if MA stayed over $200 which it had on the daily charts. The day we exited there was a massive move in MA, down over $10 in under an hour, which caught Ainkurn off guard and caused us to exit near the lows. The loss in MA accounted for most of our negative performance in the month. That just goes to show that one small mistake can case you a great deal of pain. We will have to pay more attention to our stops and not let trades get away from us.

Another trade that lost us a good deal of money was a long trade in RIMM. I entered the trade at what I thought was a good level and had a mental stop. The only problem was that it traded through my stop by about $3 dollars intraday and I did not realize it until it was too late. I ended up losing a lot more money than I planned on that trade and will have to be sure I stick with my stops even if I am hit intraday.

As far as leverage is concerned we were not over leveraged at any point during the month. We never had more than 50% of our capital invested at any one time. That leads to the final question of market trend. I felt confident we would go lower but was not positioned correctly to take advantage of falling prices. After my return from Texas it took a couple of days to get back in the swing of things. During that time the market had its huge drop over the holiday weekend and I put the brakes on any trades. From that point on I was behind the curve. I have been caught trying to short the market that last couple of days which added to our negative performance. I have had a handful of small losers and am still sitting on a few.

I also have been trading YM futures in an attempt to just add some small gains during times when I did not have on any swing trades, but I ended up losing almost $1,000 instead. In December I put on 15 swing trades with a profit of $5,000 and at the same time lost $1,800 trying to daytrade futures. I have realized that I do not have enough experience trading futures and cannot swing trade and trade futures successfully at the same time. I will be focusing all my time on swing trades from now on.

- Tradeitup