Risk Over Prediction: An Award-Winning Hedge Fund Manager’s Blueprint

Prediction to Governance: How an Award-Winning Hedge Fund Manager Built an Institutional Track Record

Retail traders obsess over predicting the next move. At the institutional level, prediction is replaced by risk governance.

Alex Douedari: DOQ spent nearly two decades in the industry, including running the trading desk for a Swiss hedge fund. When he returned to the markets to manage his own capital, he didn't want a standard retail setup. He wanted a verified, audit-grade track record capable of absorbing institutional and family office capital.

On this episode of the Market Masters podcast, we sat down with Alex to discuss his transition back into asset management on the Darwinex infrastructure.

Here is the blueprint of an institutional operator.

1. Drawdowns as an "Operating State"
Most retail traders view a drawdown as a strategy failure. A professional views it as an operating cost.

Alex emphasises that drawdowns are mathematically inevitable. You do not fix them; you manage them with a strictly defined playbook. Rather than panicking or tweaking parameters, he accepts periods of drawdown as a natural function of the system.

"To me, it's an operating state, it's not a failure of a strategy... it's just like when you drive a car. Sometimes you accelerate, sometimes you hit the brakes, and both sides need to work in a reliable fashion." - Alex Douedari

The Lesson: Stop trying to eliminate drawdowns. Your objective is to ensure your drawdowns are finite, governed, and mathematically non-destructive to your long-term capital. This is exactly what our Risk Stability (Rs) metric audits.

2. Risk Governance Over Prediction
Many traders believe their edge is finding the perfect entry or front-running macro events. Alex argues the opposite.

His strategy does not rely on fundamental news or complex macro models. He trades market structure based on price acceptance and rejection, enforcing a strict minimum asymmetry of 2:1. If the risk-to-reward ratio isn't there, he simply refuses the trade.

"I consider myself a lot more a risk governor and not an opportunity hunter, because markets give you endless opportunities." - Alex Douedari

The Lesson: You do not need to predict the future to generate alpha. An edge is simply the repeatable execution of asymmetric risk.

3. Scaling by Slowing Down
There is a persistent retail myth that you need triple-digit headline returns to attract large investors.

As Alex transitioned DOQ to target family office capital, he did the exact opposite: he reduced his risk. Institutional allocators are not looking for a lottery ticket. They want a strategy that survives regime changes without altering its core character.

"...we deliberately moved to a lower, more professional risk profile. We had materially lower drawdowns since then, but we preserved the underlying edge." - Alex Douedari 

The Lesson: Allocators care more about the stability of your behaviour through different market regimes than your peak headline return. This is why our Risk Engine standardises risk, rewarding managers who handle their own leverage responsibly without requiring external intervention. Volatility kills compounding.

4. Controllable Behaviour vs. Uncontrollable Markets
You cannot dictate what the market will do today. You can only dictate how you will react.

Alex credits strict desk protocols for keeping his edge intact under pressure. Every parameter is defined before capital is deployed, ensuring that he is never improvising or trading to fulfill an emotional need.

"I actually think most strategies don't fail because the market is hot. They fail because humans change the rules under stress." - Alex Douedari

The Lesson: Process is absolute. If you change your rules to avoid temporary discomfort; like holding losers hoping they turn around, you will eventually blow out. Our Loss Aversion (La) analytics mathematically detect if you are emotionally attached to losing positions. Build a structure that protects you from your own emotional impulses.

If you are serious about evolving from the "Acquire" phase to the "Capitalise" phase, Alex's approach offers a masterclass in professional discipline.

Watch the full conversation on our YouTube channel!

This episode is also available on Spotify. 

Enjoy, 

Your Darwinex Team

*Your capital is at risk. Past performance is not reliable of future results.

The content of this interview is for informative and entertainment purposes only and is not to be construed as financial and/or investment advice.