Trader Interview with Flagship (DARWIN $XAX)
Looking at the DARWINS listed on our platform, DARWIN $XAX will certainly catch your eye: despite having a low “Experience” score, this DARWIN managed to be featured in the “On Fire” , “Trending” and the “Promising” filters. Not bad! Want to know more about the trader behind DARWIN $XAX ? Don’t miss our latest trader interview!
Tell us a little about yourself. How did you first catch the bug for trading and how long have you been trading for?
I am 20 years old and I started off with the markets when I was 18. I am currently in third year at university studying industrial engineering, I have always been interested in numbers and maths. Since I was at school I have taught myself certain things, I liked computers and I taught myself how to programme, something that I didn’t realise would end up helping me a lot in the world of trading.
One day by chance I was watching a film about the markets and the knowledge required to get ahead in them, so I asked through extensive studying if it really was true that you could get rich through the markets. In the end I decided to spend my free time (the little I had from university) reading books and studying how the markets work, from the more basic aspects to more complex ones.
As in the majority of cases, my first strategies were manual ones, I tried moving averages, fundamental analysis, scalping, and so on. Eventually they all had the same problem, the human factor. It is not possible to spend all day long analysing the markets, because you end up making mistakes. Thus I opted for automated investing. These systems follow rules strictly, without any emotions which could change how they work, no matter how complicated they might be. After a time working on the automatic investment I finished programming $XAX, but it doesn’t stop there: while the system is trading I can continue to programme and try new strategy. That is what I spend my free time doing, programming new ideas, carrying out tests and lastly trading.
In regards to your strategy, which assets/pairs do you usually trade? What timeframes do you like using?
At the moment I am trading with the pair XAUUSD, although I have a project for a portfolio in which I will use more pairs such as EURUSD, EURJPY or USDJPY, amongst others. In regards to the graphs, I like those of 15 and 30 minutes, as well as those of 1 and 4 hours, and on occasion I make use of daily graphs in combination with others of a shorter timeframe. But I have to recognise that my favourite is the one hour graph. I consider 60 minutes to have the perfect combination between the number of entries that the systems can carry out each day and the little noise the signals make.
As a trader, what would you say is your main strength?
I think that my main strength, aside from that which comes with automated investing over manual strategies, is the statistical knowledge. I make use of many techniques based on statistics to validate and test my systems correctly, amongst the better know, I use multiple tests from Montecarlo to adjust the risk on my systems. In addition, some of my systems use advanced techniques such as temporal series analysis and neuronal networks, which are present in $XAX to predict market movements and continually readapting to these conditions.
And your biggest weakness?
The lack of means is currently my biggest weakness. On the one hand, the lack of capital is a problem that, although it affects me less and less, it forces me to have multiple strategies which I cannot trade. On the other hand, my main problem is the computer which I have – when I apply certain advanced methods of data analysis and even strategies and trade with multiple graphs, the tests become impossible to carry out in a reasonable timescale, therefore I have to rule out this option for the time being.
According to our algorithms, your strategy stands out in particular for your capacity to manage the Loss Aversion (LA). Is there any advice you can offer to other user so they can improve their score for this attribute?
For those that trade manually my first advice is to try to get to know yourself, each person can withstand a certain amount of risk, and trade with a demo account thinking of it as it were real money. If at some point a movement closes in a way that isn’t in accordance with your investment plan, you ought to change your risk control, improve your psychology when investing, or simply change your investment plan, regardless of the result of that movement in itself.
In regards to those who trade with EAs my advice is to place a big importance to the tests to adjust the risk control, one backtest alone is never enough to show a system’s maximum drawdown. Learn to use the Montecarlo tests, put your systems through difficult conditions during the backtests, and remember that the live market is different to the tests, therefore it is important to put each system through a demo period.
What would you say is the most important lesson you have learnt in the world of trading?
Constant evolution. Every day I try to learn something new, often from books, although there are other ways. The markets are subject to continual change and strategies that were profitable in the past would not be so today. Therefore, I try to keep an open mind to new ideas. New problems will always pop up and the way to solve them is by continuing to learn. This is why it is very important to be prepared for new possibilities and experiences. When you think you have got it all sussed, you are mistaken!
Lastly, do you have any comments you wish to add for other traders or investors who are reading?
Make the strategy adapt to you. Adjust the risk management, include indicators to filter signals, use the economic calendar, and so on. There are many ways to get the best from the market, the key lies in making that strategy be suitable for you. In my case, my timetable limits my manual investment, however automatic investment allows me to work at the weekends, hence why I adapted my strategy. And, above all, enjoy it, if in any given moment your cannot feel that excitement, remember what it was that led you to invest in the first place.