Positivebit, tell us a little about yourself. How did you get started and how long have you been trading for?
I started trading 20 years ago when it was not possible to open positions in the market automatically but only get a “buy-sell” signal with a sound pop-up and the trader would stay in front of the computer or very near and make the operation manually.
I liked programming, I remember I used metastock, but the stress of 24h/day was not good for me and I stopped.
Few years ago I re-started again once I found that technology had made a forward step and allowed automatic trading.
I work as a programmer so it was easy for me to face all the aspects of how an EA should properly work in the right environment. Another important fact is that I love mathematics and numbers and we all know statistics is very important in trading.
About my DARWINs, there is deep research and development worked into them. For example, I tested more than 300 algos and only 7 are in use. Each one of these algos are customized and tailored for the needs, so we can say that the hours used to develop TKT and TTK are now > 5,000.
The internal workflow has got important rules. All strategies are coded with a unique number, they are tested in real BEFORE going into “Production” and the results are double-checked in tester and in real accounts to check the effectiveness of the market and the broker to every single strategy.
With DARWINs there’s also another aspect to implement: the capacity. This, in my opinion, is to be linked to risk, because the less I stay in the market the better (for spike/gaps lack of liquidity, etc.) but the capacity will be affected. To increase the capacity it is necessary to be exposed to the market longer and this is something I want to avoid. I prefer to have “selected investors” using my DARWINs but so that they can stay more safe about their deposit.
Currently, you’ve three DARWINs (TKT, TTK, BKP) that are uncorrelated. Can you briefly explain the logic of each of them?
TKT – the best Darwin I’ve got – is ideal for big deposit:
- Super safe because it doesn’t trade over weekends, avoiding any possible gaps.
- It opens positions always with hard stop loss sent directly to the broker avoiding any possible tech issue (latency/internet, connection/software).
- Trades last the minimum possible time in the markets – again for avoiding possible gaps or extreme volatility that could trigger stop-loss.
- It is composed from 5 strategies in which the risk is divided – this mitigates the grow curve, draw down and reduces the stagnation period.
TTK is totally new from august 2018; it is similar about the safety to TKT but use algos and strategies that I call “new Kids On The Block”: it means that new patterns are found in the very near past, and that they can be good for the future too.
While TKT works only with strategies that pass many years of backtest, TTK uses only few years. But there is a possibility that this can be the beginning of a new trend.
BKP is a totally different because it uses logic to keep positions open for many hours/days. Of course the risk is calculated for the deposit size to avoid stop outs with leverage in case of gaps but the equity will always stay “at work”. The capacity of this Darwin will be larger than the other 2 darwins.
Two of the three DARWINs (TKT y TTK) trade 75% of the time between 20:00 and 00:00 UTC. What makes you trade at this time of the day?
I observed that the market is quiet after New York session and 80% of time is ranging by side so the algo is adapted for this.
However, in the case of the third DARWIN (BKP) one can observe in the “Trading Time Distribution” graph that it trades during all 24 hours of the day which indicates that it’s algorithmic, right? ¿Do you trade all three DARWINs through an EA or only BKP?
I confirm all algo 100%, no manual intervention – never. Cut the hands but not touch the strategy. In case things go bad there is Mr. “Stop loss” a must in every trading strategy with the right money management.
In the case of DARWIN TKT I see that the VaR of the underlying strategy is very similar to that of the DARWIN. Pure coincidence?
It was calculated after observing how the VaR change after some volatile day – it was a deep work – there is some lag between modification and how the VaR value responds. Each of my DARWINs has got many strategies that can have open positions at the same time so the work was made to be not overlapping out of the range. Another work was made for correlation.
Your DARWINs’ “Daily Performance” graph attracts attention. Seems that you tend to have very good returns on Thursdays and Fridays while Wednesday is the worst day for all three. What do you think can be happening on Wednesdays?
On Wednesday there is a little more movement during the night, more volatility – in the last months it took bad performance but in the long run the statistic says it can be good. In this graph we can see the 2018 filtered backtest of the DARWIN that produces losses on Wednesday, while in the next graph the backtest of all years produces the best performance on Wednesday – I will not change the strategy for a micro-trend.
What are your short and mid-term goals at the DARWIN Exchange?
To get positive results in terms of risk aversion and keeping the DD low like it is. A big work in TKT was made in the last months – I am extremely positive about future performance based on deep back test, comparing new strategies, fixing the loss aversion.
Which one of the tools offered at the DARWIN Exchange is the most useful to you?
For sure the possibility to filters the DARWINs.
If you were the Head of Development at Darwinex, what would you choose as the next thing to implement?
The possibility to check the profit factor for each Darwi for each strategy of it.
Which DARWINs would you highlight from the almost 2000 currently listed at the Exchange and why?
The DARWINs that meet 3 criteria: 2/3 years real history in Darwinex, DD less than 10-15%, and last but not least D-score >70.
Any books you like to recommend to fellow traders?
My suggestions to investors and traders is to read literature about risk management and portfolio diversification.
Finally, did you know that on account of the fact that you have DARWINs with a D-score above 70, you’ll receive a 40% commission discount for all your trading strategies? What do you think about this?
Everything bring to a more competitive conditions to trader also brings new opportunities to broker to grow up – compliment with darwinex stuff for this improvement –happy trading & investment to everybody!
Any specific questions you would like to ask Positivebit? Leave them as comments and we’ll try to get you the answer!
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