Behavioural road-map score: 9.5 out of 10.
I was quite fortunate in my trading this week. My gross return was just under 4%, but setting aside a few hundred pounds for expenses (car MoT due, tyres and brakes need replacing) whittled the number down to a more modest +1.4%. Alas, the problems of inadequate capital are becoming quite glaring.
Something unexpected has happened to my behavioural score, which seems to be consistently at the higher end these days. After practicing a fairly disciplined approach for a few weeks, my equity has climbed only incrementally. However, these small gains are the product of disciplined hard work and they give me something to ‘protect’. Because I know a small slip-up could easily wipe out these gains, I am trading on the safer side, sticking as closely to my script as possible. It is purely psychological, but it does feel like a virtuous circle of a sort.
It’s worth noting that the current goings-ons in the currency market are particularly interesting:
- GBP is supported by high and rising interest rates, and continues to flirt with the 2.00 handle.
- The RBNZ is fretting over the strength of the kiwi and intervention is proving of limited value (no surprises there). I wonder, do they not believe in the free market?
- The yen – the carry traders funding currency of choice – continues to plumb the lows.
- FX volatility is at unbelievably low levels.