VolcanoFX is the trader behind DARWIN $GTD. We highly recommend reading on to find out what it takes to run a consistent trading strategy for 4 years in a row…
On top of being a great trader, VolcanoFX enjoys interacting with fellow traders and investors. Make sure you visit GTD’s thread in the Darwinex community forum to chat with this trader!ç
So, tell us a little about yourself. How did you get started and how long have you been trading for?
First experience with trading came from from my parents in 1999 with the Stock Market. In the following years passion pushed them to approach Forex. I always followed their activity with interest and was passionate about it from the beginning but, as the years passed, due to our lack of time and my studies my father and I reached to a big decision: convert manual methods into algorithms. We started studying MQL4 in order to convert in algos different manual approaches developed in years with the aim to avoid tons of hours at the screen. The maze began when I was hypnotized reading a gift from my father, a book about the evaluation and optimization of Algo Strategies: it was the beginning of the spiral which included obsessive studying to understand how robust systems we had were and what was necessary to avoid over-fitting. After that having studied tons of material and books about quantitative trading, we created and modified our methods into Expert Advisors according to studies, experiences and new data of Markets until we started VolcanoFX, a Portfolio of the best we had which could work for others as well as for us. This work is still continuing up until the present, chasing the constant change of markets, studying other books and materials in order to develop something new with the aim to improve things month by month: our belief is that there’s always room for improvement.
About your trading strategy: what pairs do you usually trade? Do you always trade the same timeframes?
VolcanoFX (the strategy behind DARWIN $GTD) is an automated System that is tested with success on different Major/Minor Markets but is currently trading on the EURUSD, GBPUSD, USDJPY. Different strategies are mixed in order to cover almost all Market Phases, such as Trend, Reverse, Retracements and Lateral ones. DARWIN $GTD does not have a particular timeframe and one single look for Markets, it tries to look for different movements without discarding any possibility when conditions permit. Some algorithms trade on H1, other ones on M15, M5 and M1. Some of them need confirmation from a higher timeframe to make their decision, whilst others have the need to take information from lower timeframe. This peculiarity allows the system as a whole to constantly watch the Market with the humility that not only one movement is possible in a particular session and that if one of the components is wrong, there is another one who is ready to face the situation in a different fixed mode.
Are they always trading Market? Absolutely not!
With several automatic controls limiting the positive correlation between components, the general alignment of the Strategy has an homogeneous behavior and exposition during both favorable or adverse periods. Avoiding specific correlations leads to having different moments where without reaching all trading confirmations there is no trading activity. You can’t predict how, when and how much a Market will move but our conviction is that if you can look at the situation from a different viewpoint you can also have a good chance of having profit from different occasions, even if sometimes you stay out. The result is a System that loses and gains with the aim to have more green than red at the end of a year.
As a trader, what would you say is your greatest strength?
As my type of Trading is Algorithmic the strength of this kind of system is to put out emotions from trading, a commonplace, but for me it’s the key. I have not a particular strength, I’m quite a normal person. If I have to think about a quality, I would say the unstoppable need to look around that has brought me to move my look on different type of trading and so to include new approaches into our portfolio. I have also a spasmodic need to have confirms on things I have with Documentations and Tests. I print everything and I look it many times with the tranquility of being able to modify something if, after a careful Algorithmic Analysis, is necessary.
And your biggest weakness?
Weakness? I can’t count them, I have so many. Probably the biggest one is that sometimes I act like an apprehensive parent with their children. Sometimes I’m too severe evaluating their behavior, I do not realize some of their qualities, in other moments I get disappointed for their behavior and there are few times when I feel satisfied with them. Having a connection with them is crazy but it happens when you are focus so much on one thing and keep trying to improve it everyday. I love what I do and perhaps another weakness I have is that I spend many hours checking that everything is fine and that everything is in line with my expectations.
Our algos tell you are very good at when it comes to Loss Aversion & Performance. Any ideas for other traders who need to improve on those attributes?
One of our beliefs is that a trade is placed for a reason: price will move from “x” to “y” in a “t” time. Our Algorithms try to isolate the entry with a good Timing. After this the key is having instructed them to think that if a trade doesn’t go into a predetermined direction it is because they can have a wrong point of view on a particular market movement. So, why place an absurd StopLoss prolonging an agony and not accept a possible mistake? Until the absurd SL there are a lot of other possibilities to Trade. This is also our belief and so we’ve taught our ExpertAdvisor not to let losing position run longer than the winning ones. In regards to our good attribute on performance I can say that every Algorithm we have actually has a good winning percentage / profit factor, combined with a small risk.
What is the most important lesson you have learnt in your trading career?
There are a lot of lessons I’ve learned on this path. You first have to accept that a good system also has to face moments of Drawdown in its life and so that you have to endure stagnation of it to trust your work. Even if it takes a lot of time, if you work in a proper way, you study a lot and accept that everything can be improved, there is an high ratio of chances that you will succeed. To do this you first have to accept that nothing is perfect, everything can be modified and if you want to profit and survive in the markets in the long run, you have to continue your research without forgetting what you want and what you actually have. Markets are always right, if you start by accepting this and also your loss with humility, with hard work you will arrive surely one day at a big improvement.
Finally, any comment you’d like to share with the fellow traders who read this?
My belief is that good things come with time. Stop looking for short term big returns, start studying books, charts, indicators, ratios and markets. If you are reading this, you are on a site where you have possibilities to be a very good Trader but also a good Investor. Both are very difficult categories, but study and honesty will always be rewarded.