Tough Month for my Breakouts and Reversals Model

by Ronald Guerrini|Published March 8, 2012

Author: Ronald Guerrini

Covestor model: Breakouts and Reversals

February was a very poor month for the Breakouts and Reversals model portfolio.

This month was a lesson in not letting an opinion about market direction overrule the trend. The model portfolio lost about 4.3% in value as the major stock benchmarks added about 4%, leading to an approximately 8% under performance for the month.

This was due to a short bias that was maintained too long despite evidence to suggest the market was not falling. This position should have been cut sooner.

AUTHOR

Ronald Guerrini

Ronald began trading in 2006 using Contracts for Difference on the Australian Stock Exchange. He has traded using several approaches and believes technical analysis is the most effective. The most important aspect of trading is risk and managing risk. He believes he has found the level of risk that he can most comfortably trade with and still outperform the market on a regular basis.

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