Interview with Integracore2 (DARWIN $PLF)
This week we are honoured to feature Integracore2 on our series of trader interviews. The trader behind Integracore2 is not only one of the nicest traders we have met lately, turns out his DARWINs are pretty good, too (LZL is currently ranked 3rd in our Hall of Fame!). We hope you enjoy the interview as much as we did.
1. So, tell us a little about yourself. How did you get started and how long have you been trading for?
I’ve always had a fascination for applied mathematics and its place in nearly everything that exists today. I believe absolutely everything can be measured, be that theoretical or physical, fundamental or technical, emotional, psychological, musical, you name it – hence, having a sound base in mathematics comes in handy if you’re setting out to “decipher” the world and its funny ways..
It can give traders a definitive edge in risk management and overall strategy development, irrespective of which asset class(es) they choose to trade.
It’s what got me into analyzing the stock market over a decade ago, and into forex when it became more readily accessible via ECN/DMA/STP to the retail trading sector (I got stung by many a bucket shop market maker along the way, and no book on the planet could have helped me avoid that – it was my most valuable lesson learnt ever.)
2. About your trading strategy: what pairs do you usually trade? Do you always trade the same timeframes?
I trade forex and stocks — I look for solid “liquidity” or fundamental soundness when choosing an asset irrespective of asset class.
This leads me to trade liquid majors such as EUR/USD, GBP/USD, AUD/USD, USD/JPY and NZD/USD in forex and I use the same criteria along with many more when designing my stock portfolio.
My main DARWINs IntegraCoreLive2 and IntegraCoreHighRisk both presently trade the EUR/USD, GBP/USD and USD/JPY, while my most recently started Darwin IntegraCorePortfolio trades all the pairs I’ve listed above.
Re: timeframes — I am of the view that any strategy that’s designed for anything under the 1-Hour timeframe will lack in the Consistency and Risk Management attributes over the long term. All my algorithms focus on deriving the majority of their information from higher timeframes than H1, with only some additional filters on the M15 timeframe for entry and exit purposes.
3. As a trader, what would you say is your greatest strength?
Hmm… That’s a difficult question — I would say “problem solving” could be one of my greatest strengths as I am at my best when handed a challenge, however as a trader I believe I don’t have any major strengths as we’re all equal participants here with different individual approaches, strengths and weaknesses.
4. And your biggest weakness?
I could write a whole book on this one! haha…
When I first started out, it was not having the emotional stability to religiously follow my own systems. I would make countless mistakes (such as discarding strategies way too early or not waiting until all criteria for entry had been met and making impulsive decisions).
At the present time I feel my biggest weakness is watching my screens for too long each day (this is very bad) – I don’t need to as I am now operating 100% automated as far as my forex trading is concerned, but I still can’t shake the habit and am at times (though fewer each year that goes by) prone to impulsively terminating drawdown trades earlier than my own systems would have done so for smaller losses than mine. Working on fixing myself… long way to go I’m afraid…
5. Our algos tell us you are very good when it comes to Timing. Any ideas for other traders who need to improve on that attribute?
I believe timing as an investible attribute relies proportionally on both entry AND exit logic in a trading system.
Too many traders focus only on entry and use purely mechanical “convenience” methods such as fixed or indicator trailing stops for their exit logic. These are very poor methods for long term timing and consistency, may work in the short term but the probabilities weigh heavily against them for the long term (the market changes too frequently for such static risk management to remain effective forever).
A system can have a 99% entry accuracy and still take equity down to zero very fast without robust exit logic and intelligent risk management.
Similarly, a system can have a 26.2% entry accuracy and still have strong consistency and timing Investible attributes owing to robust exit logic and risk management rules. Such a system can easily demonstrate a win ratio of over 70% like in my Darwin IntegraCoreLive2.
Unfortunately, most new traders immediately discard strategies with low entry accuracy, when they should really be looking at how the exit logic and risk management tie in to the entry logic in the first place.
To improve your timing, one must improve both entry and exit logic, preferably such that they are symmetric. If a trader can achieve that, their Return-to-Drawdown Ratio will improve dramatically, as will their Win Percentage, Z-Score and R-Expectancy — having favorable values for these ratios is absolutely critical for maintaining and improving favorable timing over the long term.
My Darwins IntegraCoreLive2 and IntegraCoreHighRisk run automated strategies built and maintained using the principles above.
6. What is the most important lesson you have learnt in your trading career?
I think there are more than one most important lessons I’ve learnt over time…
1) Forex is “the” hardest asset class to trade, guaranteed. It is more dynamic, more prone to random unexplainable events, and requires infinitely more hard work in strategy development than any other asset class known to man.
2) Forward testing a strategy you’ve developed and tested to oblivion – on a demo account – is a royal waste of time and effort. All strategies a trader considers taking live must be forward tested on a live account with a meaningful amount of capital within personal equity risk tolerance. Trust me – forward testing with $50 vs forward testing with $1,000 are two totally different psychological environments for the trader.
3) Do not trust market analyst’s predictions – form your own opinions based on your own research and understanding of the market.
4) Exercise regularly — it is critical to keep fit if you want to survive in this business. Some of the best traders I know personally are long distance runners who run a minimum of 5 to 10 miles each day, 2-3 days a week, and pound heavy weights in the gym on 1-2 days a week.
7. Finally, any comment you’d like to share with the fellow traders who read this?
Darwinex with its development of Darwins and DarwinIA has truly impressed me on so many levels that I don’t know where to start in my praises… If you have an account at Darwinex, I believe you have already jumped over 50% of your hurdles as a trader – that’s how important a great broker is.
My Darwins IntegraCoreLive2 and IntegraCoreHighRisk can handle quite some variation in execution conditions, spreads, slippage, requotes etc, but they are currently experiencing the best-case hypothetical execution conditions they were tested for during development, super low spreads, super low slippage, super low everything.. available right here at Darwinex.
Final comments – want to have a shot at making money consistently over the long term? Then keep your strategies ridiculously simple and work on improving your entry and exit logic symmetrically. Do not over-optimize, because the more specific you start making your parameters (e.g. Take Profit of 23 instead of 20, 25 or 30), the more curve fitted and less adaptable to market conditions your strategy becomes.
Thank you for this interview opportunity Darwinex folks! I will be publishing a blog post here soon with some more detail on some of my answers above.