Interview with TradeSignalMachine (2)

5 July 2016
The Market Owl

If you go through the list of DARWINS that were allocated funds in DarwinIA last month, DARWIN WFJ will probably ring a bell… of course it does! We interviewed TradeSignalMachine last year (you can read last year’s interview here).  Now that WFJ has been allocated € 80,000.00 for a 6 month period, we thought it would be good to know a bit more about the trader behind last month’s second DARWIN.

How did you get into trading?

I’ve always had a fascination with the science around prediction using mathematics and probability theory. I also had an interest in coding and so I started writing prediction algorithms for sporting events from an early age – building algorithms to trade the financial markets seemed like a natural progression. For these reasons I’m now a 100% systematic technical trader, I effectively develop systems with set rules that run and trade automatically 24 hours a day.

Do you have a specialist area?

I mainly trade in currencies and stock indices. Particularly the Aussie dollar and the Kiwi dollar – I find that these currency pairs tend to work best for my systems. I also trade the Eurodollar, but market uncertainty has made it harder recently and it’s not trading quite as well for people that use trend-based systems. I am a strong believer in system diversification and so I like to use trend following, mean reversion and am also now putting most of my R&D into arbitrage based systems.

What sets Darwinex apart from other platforms that you’ve tried?

There are two main advantages. Firstly is the broker model that Darwinex runs. I’ve been involved with numerous brokers in the past with varying levels of success. Ultimately, I suffered as a result of dealing desk models, and it took some time for me to fully understand the implications, and drawbacks of this. Darwinex operates as a true ‘broker’ model with DMA which is the only viable option for anyone who is serious about trading. Darwinex also have great execution in my experience, and also tight spreads. During my time with Darwinex I have had regular calls with various members of their team and what I have learnt is that I can trust them implicitly. I know they are on my side and want me (and every other trader) to succeed.

Secondly, after some initial success with trading prior to being with Darwinex, I had quite a bit of interest from friends and family who wanted to invest in me, so I started considering options for how I could facilitate this. What I quickly found was that if I was going to operate in a completely transparent and legal way, the necessary regulation was going to work out far too expensive to even consider. However as part of my research I came across Darwinex. Their model gives good traders an extremely easy and quick way to get investor capital. They take care of the FCA regulation, allowing traders to get on with what they do best – trade.

Darwinex also means you can benchmark yourself against the rest of the Darwinex community, which I find is a tremendous motivator to continually push myself to improve.

What three pieces of advice would you give to a new trader?

Firstly, don’t get greedy, and don’t believe the hype out there about ‘getting rich quick’, and ‘trading from the beach’. Traders that do, approach trading with completely the wrong mind-set and the result of this is that they over-leverage on their trades. In fact, it’s not uncommon for a new trader to completely destroy their trading account in mere days by over-leveraging. This happens with all brokers but it is more transparent on the Darwinex platform, where it is easy to see that many traders are carrying far too much risk. My advice is to trade small, trade safe. You will only have long enough to learn how to trade, and eventually become successful if you survive to trade another day. Trading big and over-leveraging means you will not.

Secondly, it’s really important that you have a good system that gives you a real edge in the market. A mistake that a lot of traders make is that they buy black box trading strategies, when in reality most of them don’t make money. You need to be able to understand your own system and trust it – otherwise you will lose confidence during the inevitable drawdowns, because you don’t understand the reasons behind it. If you do understand your system then you can determine if this is just an expected drawdown or if you need to take some form of action.

Finally, it’s critical for traders to stick to rules. If you’re a discretionary trader, you simply must have rules in place. In any other career you will have rules, policies and procedures imposed on you. You have to adhere to them or you get fired. Trading is different. For retail traders there are no set rules that anyone is imposing on you – you can effectively do what you want. This is why so many traders lose their heads and their money – you have to make sure that you build your own rules and abide by them in order to execute successfully and consistently. You don’t want to be deciding how to react to adverse market conditions while they are happening. You need to have a plan beforehand and then use it.

What makes Darwinex an especially good option for beginners?

New traders need to be sure that the broker they’re using to transact their trades is going to be on their side. The odds are stacked against new traders from the start with a dealing desk ‘broker’ – their best chance is to go with a true broker who offers direct market access, such as Darwinex.


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