Volatility continues to be soft, as in recent months. In fact, volatility is about as low as it’s been in the past five years. As you can see by the picture below, there are only a couple of spots that have rivaled this one.
Implied volatility isn’t making the future look bright either. The VIX is also at it’s lowest point in the past 5 years or so:
Why all this talk about volatility? As you may remember from past articles, my own trading model, the MS8 Trading System, depends on, and even thrives on, volatility. All this “calmness” spelled a stinky month for the model.
Our overall exposure was lower than usual, at just 11.46% (meaning that’s how much time we had cash in the market). Below are a few of the key statistics:
| Net profit for the month | -1.73% |
| Total number of trades | 14 |
| Average return per trade | -.74% |
| Win ratio | 57.14% |
| Exposure | 11.46% |
| Total time invested | Less than 10 minutes a day! |
At the end of the day, the small number of trades and low winning percentage tells the story. With such a small amount of trades, the law of averages can’t work in our favor. It only takes a bad trade or two to mess up the month, and that’s exactly what we had. Hey guys, we could really use some volatility!
Good Trading…
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