Interview with eromawyn (DARWIN $EZX)

Fellow trader eromawyn was featured on a popular French trading blog. We thought it’d be good to have a brief interview with the trader behind DARWIN $EZX!

Monthly return since July 2016


So, tell us a little about yourself. How did you get started and how long have you been trading for?

I began, initially timidly, to take an interest in markets around 2008. At this time, my company had just been bought by Rentabiliweb, listed on the Brussels Stock Exchange, and its CEO (Jean-Baptiste Descroix-Vernier) was the one who taught me how to read Japanese candlesticks. I began to imagine strategies, without knowing it I had just “reinvented” the martingale strategy (which in the end I would not use).

I have a background in computer science, so I mainly dreamed of being able to analyze and then develop automated strategies. It was especially during my discovery of MT4 that I totally plunged into it, in spring 2011.

Thanks to MT4, it is possible to develop rather complex automated strategies, optimize them and backtest them. The MQL4 language, quite close to PHP (or C), is nothing complex when you have a little background in computing. We are immediately in the bath, and very quickly we realize the limitations of MT4: no backtest multipair, limited history, different timezones between broker, no news management, no backtests in tick, Analysis of the backtest, etc … I have looked a little at the other platforms, unfortunately there is no ideal platform (maybe AlgoTrader, but the price reserves this platform for professionals); In the end I get by with MT4 and some external add-ons. And I dare to think I’m not too bad when I see the results of DARWIN $EZX and the number of investors who trust me.

About your trading strategy: what pairs do you usually trade? Do you always trade the same timeframes?

The pairs that interest me the most are EURUSD and GBPUSD; The AUDUSD, NZDUSD, gold and oil are also present in my trading. On the break-out strategy behind $EZX, the gains come in the order of EURUSD, oil, GBPUSD, and quite incidentally NZDUSD (the other pairs are not traded).

In fact, I do not focus on pairs; What does interests me is: do I have algorithms (strategies) that could be profitably deployed on the pair? When I develop a strategy, I first try to get something on a pair, then I try to backtest on the other majors to see what is the results. Obviously, it is the most liquid pair with the smallest spread that I mainly look at in general (EURUSD).

The good unit of time is neither too small – scalps of 1 pip or less do not interest me – nor too long – I want to trade (and therefore win) often. Also, I look for the signals on bars M5 to H1, to make trades that will last a few hours to a few days at most.

As a trader, what would you say is your greatest strength?

My biggest strength is to not (or let’s say no more) trade the forex market manually anymore. My strategies rely entirely on in-house technical analysis; all my trades will be opened by the computer, and closed by the computer. No human intervention, no emotions. No loss aversion or other cognitive bias that could interfere in my trading. Although this does not prevent me from taking an interest in trading psychology.

My trading strategies are thus verified and backtested on a fairly long history. For example, the strategy used on the DARWIN $EZX has been operating on the EURUSD since the beginning of the euro (1999). This is one of the problems that we encounter as an automated trader: where to find reliable historical data? On the Forex, some very old brokers put their historical data in free access, but for example on oil WTI, I regret not having data prior to 2013.

And your biggest weakness?

The weakness comes from its strength. The computer will always trade according to the strategy… If unexpected events happen, he will ignore them and will not be able to improvise or define a new set of rules, sticking to the strategy for which he was programmed.

Our algos show you are very good when it comes to Performance (Pf) and Loss Aversion (La). Any ideas for other traders who need to improve on those attributes?

This is indeed not an accident: in automatic trading, it is easy to check if a strategy works over several years, and to know its behavior. The good rating comes from:  cutting losses as quickly as possible, and letting his earnings spin – sometimes losing my winnings, unfortunately. I’m looking into limiting this, and it even gave me a new idea for an ​​algo, but it’s a whole different story.

What interests me the most when I optimize my strategy for a given pair, is the profit factor (ratio between gains and losses):

Less than 1, it is a losing strategy. We still have to work on it.

– Between 1 and 1.2, the strategy is winning, but only in backtest. “We are all rich in backtests” as we use to say (it’s easy to over-optimize). In my experience, a strategy will generally be 15 to 20% worse in reality than in historical data. So it’s still not a winning strategy.

– Between 1.2 and 1.4 we can try to go live … with suspicion.

– Between 1.4 and 1.6, it will be necessary to continue to pay attention, but we assume it should be fine.

– Beyond 1.6, should be fine.

We will also need a large trade dataset to avoid over-optimization and to win consistently, and there must be a balance between winning and losing trades.

On the DARWIN $EZX, the results of backtests I made before going live, are:

– 2.01 on EURUSD. Suffice to say that it is quite solid. This is my best strategy, and by far.

– 1.41 on oil

– 1.74 on GBPUSD

– 1.42 on NZDUSD

– 1.01 on USDJPY, that’s why I do not trade it!  🙂

What is the most important lesson you have learnt in your trading career?

You have to learn (and accept) how to cash out the losses. Of course, it’s simpler when you have a trading plan that you follow to the letter, especially in the form of an Expert Advisor. It is completely impossible to be right all the time in the markets. But one can become very rich by being right only 4 times out of 10 (provided that the gains are higher than the losses).

And it’s the same in real life, it’s absolutely useless to be right all the time. One must know how to recognize mistakes.

Finally, any comment you’d like to share with the fellow traders who read this?

Trading is a pretty exciting world. If you want to win in the markets, you have no choice but to spend a lot of time trying to figure out what is driving the markets, and why. In the end, we almost end up interested in politics, because very often the events in the markets are related.

The problem is that many beginners are persuaded that this the way to get rich effortlessly. Of course, some crooked brokers who make such promises are not innocent, since they might be interested in the losses of their client. Without discriminating against one “product”, let’s just say for example that the apparent simplicity (promotion/marketing) of the binary options hides from the beginner the real difficulty of being a winner on this type of products.

I have not yet become rich, but I have made some gains; however for the easy aspect … come back another day! A mixture of probabilities, statistics, computer programming (even for the manual trader, knowing how to make a backtest can help develop his strategy), creativity, a lot of reading and research on the subject (and strategies studied), psychology, maybe even politics.

All this was already something that interested me more or less before trading; and if mathematical puzzles do not entertain you, maybe you are not made to trade (it sounds like a giant puzzle and endless auto trading). Perhaps also, a dose of healthy paranoia, because scams are common around the forex.

Then, it is especially the time spent that counts. Because I had to spend time, a lot of time before I could win in the markets. And I would like to have even more time to devote myself to it.

At the end of the day, investing in a DARWIN with a high rating (D-Score) for those who want to make a passive return will be much simpler.

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