2014 Official Year End Performance for Forex Profit Monster/Effect of Swiss National Bank and the Swiss Franc "depegging" from the Euro

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(The portfolio of currency pairs being traded on the 4 Hour chart with Forex Profit Monster consist of:  EUR/USD, USD/CHF, USD/JPY, GBP/USD, USD/CAD, EUR/JPY, AUD/USD, GBP/CHF, AUD/CAD.

This portfolio will remain the same each quarter unless stated otherwise.

All results INCLUDE transaction costs... THIS IS REAL LIVE TRADING so all costs, spreads, slippage, interest rate swap, etc... are included in the results.)

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In the last post I mentioned that I was up about 54% for 2014.  The final results are in, and I finished the year up 55.05% with Forex Profit Monster.  While it was a spectacular year, I do see some changes in store for me in 2015.

The amount of money that I am currently trading is actually getting to be a respectable amount (for a retail trader anyway :-P).  I've come a long way from the guy who started out with less than a couple thousand dollars several years ago... so, as of this post I've changed my time frame from the 4 Hour chart to the Daily chart.

The reason I was trading the 4 Hour chart to begin with was to increase my opportunities and grow my account faster.  As far as I'm concerned I've accomplished this... and now I'm more interested in reducing some of the transaction costs and equity curve volatility by trading less.  The current trades I have open on many of the pairs (EUR/USD, USD/JPY, USD/CAD, GBP/USD and AUD/USD) seem like they are long term trends... and now would be a good time to continue them on the Daily time frame.

I am also considering making some changes to the portfolio that is currently being traded after doing some research on a new system.  I feel there are some pairs that have performed well over the past 25-30 years on both Forex Profit Monster and the new system... and will likely be adding them in the very near future.  The size of my account will also allow some additions to the portfolio... so again, the timing is right.

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Now some comments about the Swiss revaluing their currency by "depegging" from the Euro.
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I know it was tough for a lot of retail traders who lost their accounts because of the huge move... heck, it even put some brokers out of business (R.I.P. Alpari UK).  In fact my own broker, FXCM, almost went belly up as well (I was moved from IBFX to FXCM last summer when Monex Group decided to end its MT4 retail Forex arm of the business).  It was a close call, but FXCM has gotten a new influx of capital to continue operations... and there is even a rumor that they may try to "revive" Alpari UK to give themselves a foothold in the brokerage business in England.

With all that happened last week because of the Swiss "ambush", the news wasn't so bad for me personally.

One of the lessons I've learned (and tried to pass on to others for the past several years) is to TRADE RESPONSIBLY... USING THE PROPER SIZE FOR YOUR ACCOUNT AND NUMBER OF VEHICLES YOU'RE GOING TO TRADE.  Because I follow my own advice (which not all traders do) I only suffered about a 22% draw down from the "Black Swan" announcement from the Swiss.  Most of that was lost in a long USD/CHF position... and it was thousands of dollars in open equity profit... not really much in the way of cash after I was able to close out the position.

While I can't say that I "jumped for joy" over several thousand dollars in profit disappearing in the blink of an eye and an immediate draw down of 22%, compared to what happened to many others that day it certainly could have been much, much worse.  I've also recovered some of that draw down already through other open trades and am currently only down about 13%.  Even better news is that the draw down was from a higher equity high than I ended 2014 with, because I was up almost 15% on the year already for 2015 when the Swiss announcement was made.  What this adds up to is while I lost a lot of open equity profit over this mess... I'm really only down a couple of percentage points from where I finished 2014... and only a few hundred dollars in cash.  My new mantra for now is "... it could have been worse... it could have been worse... it could have been worse..."

While I do legitimately feel sorry for those who "lost it all" last week, I must say that I feel very good about my own trading.  I figure if I can weather an event like the CHF revaluation and keep earning double digit returns that I may just be in this game for the long run. For me this fiasco was a confidence builder... yes, even after all these years of trading it's nice to build your confidence through events like this!  This is a marathon for me, not a sprint... with the ultimate goal of not just trading for a living, but to be able to provide an even better lifestyle for my family and to use the skills I've developed into my retirement so I'm never forced to have to worry about where my next $ or "paycheck" is coming from... or worse, depending upon someone else to provide "investment returns" that I'll be living on.

Here's hoping you survived "Hurricane Swissy"... and if not, consider it a life lesson. Get up, dust yourself off, find a little more risk capital and start trading with more confidence that with the knowledge gained you can probably withstand a "Black Swan" like that next time.

If you have any questions just send me an email through the website and I'll be happy to lend an ear... as much as I legally can :-)

Jim
www.forexprofitmonster.com