Trader Interview with Pulse07 (DARWINS $PUL, $PUZ and $PUD)
Next in our series of trader interviews, we have the honor to feature Pulse07, the trader behind several DARWINS (including $PUL, $PUZ and $PUD). This trader’s amazing returns have granted $PUL a spot in the Good Scores and the Trending filters… not bad!
Want to know what it takes to create one of the best rated DARWINS on our platform? Don’t miss our latest trader interview with Pulse07!
So, tell us a little about yourself. How did you get started and how long have you been trading for?
Since my childhood, I have been passionate about computers and especially about development. I have always loved programming everything that goes through my head, and sometimes even totally useless things. I like the challenge it represents.
Until 2011, I knew absolutely nothing about the markets, and it was an advertisement for binary options that aroused my curiosity.
I quickly realized that I could not trust this type of broker. Ultra-aggressive phone calls and surreal promises made me understand what it was all about. But it was not the lure of gain that motivated me, I wanted to take up the challenge.
In addition, the binary options seemed like a good way to start, the choice is limited to two possibilities: it goes up or down. I had a lot of free time at the time, so I spent a lot of hours there every day. I managed in just a few months of hard work to program a promising robot using metatrader.
With some hindsight, I realize that I was very lucky to get such good results so quickly when my knowledge was still very limited. This is not to say that I did not commit the usual beginner mistakes, but by chance they had little impact on my wallet and my mind.
For example, my money management was calamitous. This did not prevent me from making relatively regular profits, however the progression of my portfolio was very chaotic. Against all odds, I had very few problems with the various binary options brokers I could try. I gradually removed my benefits without worries, except for phone calls encouraging me to ask much more money rather than withdrawing. But the very low confidence I gave them dissuaded me from investing a substantial sum of money, so the profits I made from them were quite limited.
It was in 2012 that I decided to try to transpose this forex strategy with a reliable broker. It was not easy, the concept that worked well with the binary options seemed to give mediocre results this way. After several months of unsuccessful hard work, I finally got encouraging results. The basis of all my current strategies was born, and in the end it was pretty close to the one I used for binary options.
About your trading strategy: what pairs do you usually trade? Do you always trade the same timeframes?
Before my arrival at Darwinex, I used to trade only on EURUSD and AUDUSD. The concept of my strategies seems to work on most pairs, but with more or less regularity and success.
The other constraint is the spread, because my strategies are very dependent on this. EURUSD and AUDUSD were therefore the only two pairs to be really satisfactory according to these two criteria.
Since my arrival at Darwinex, I have tried to diversify, I am doing tests with EURCHF, GBPUSD and NZDUSD, but they are for the moment failures. Unfortunately, I do not have much free time left, and my priority is to devote it to monitoring and updating strategies that have already been proven. However, I do not despair of one day arriving at a result with other pairs than EURUSD and AUDUSD. I would also like to work on a trend tracking strategy, but it’s not my priority right now.
My strategies use multiple time units (from M5 to H1).
As a trader, what would you say is your greatest strength?
Perseverance, one could even speak of relentlessness.
I think that if we give ourselves the means, the success of a project is often only a question of involvement and time. Given that there is a solution to a problem and it does not exceed our intellectual capacity, I see no reason to not achieve it one day. Time is often a limiting factor, but it leads to another quality that I think is important for a trader: patience.
And your biggest weakness?
I had a lot of weakness when I started: impulsiveness, lack of rigor and wisdom, overconfidence or on the contrary lack of confidence, and so on. Since then, I have improved a lot on each of these points.
Anyway, these weaknesses have stopped having an impact on my way of trading as soon as my strategies have integrated a strict money management, a coherent risk management, that I am prohibited from interfering in. This is the advantage of automatic trading, psychology does not really matter if you do not intervene manually.
Our algos tell you are very good at when it comes to Timing (Os)(Cs) and Consistency (R+)(R-). Any ideas for other traders who need to improve on those attributes?
The operating principle of my strategies is precisely timing and regularity, but I have not done anything special to get these notes or improve them.
From my point of view, these attributes are very dependent on the type of strategy you use. For some, they can be a sign of quality but for others, have very little interest. As a result, I do not think it’s useful to worry about improving the ratings of these attributes, especially if it goes against the original idea. A strategy that needs these attributes to work will, in any case, naturally tend to get better grades as it improves.
In an attempt to illustrate why my strategies have such ratings, here is the core operating system: the goal of each trade is to take a small profit of a few pips (usually from 6 to 10 depending on the strategy), with a limit of loss set between 2 and 5 times this value. A trade can also be closed at any time if certain conditions confirm that the original signal was not good. These conditions become easier and easier to reach as time passes, so trades never go beyond a few hours (which also explains the good (Dc) rating.
There can be several successive trades that add to the position, but limited from 4 to a dozen, depending on the strategy.
The position is also limited, when the losses in progress exceed a certain level, one of the trades that compose it has to be closed. A losing position can also be partially closed during a small favorable move (by closing one or more trades that have reached their profit limit). The aim is to limit the leverage as much as possible while making the most of the opportunities that arise. All this leads to consistency in the duration and the amplitude of the positions, and thus of good scores (R+) and (R-). And a great success rate (more than 70%), which in my opinion partly explains the notes Os and Cs.
The only notable weakness – out of (Cp) – of this strategy is its risk aversion (La), offset by a win / loss ratio of 74%. What is the reason behind these risk settings?
This also comes from the structure of the strategy.
The goal is to capture a movement of a few pips with a high probability of occurring. To achieve this while limiting the number of trade, we must leave room for maneuver and thus let losses run a bit.
Shortening the stop-loss would greatly reduce the winners / losers ratio which is the key to the success of this strategy. But also, close the trades much more often and quickly, to finally have to open them again a few minutes later, with the negative consequences that it would have in terms of spreads and commissions.
Increasing take-profit would make the strategy less efficient and less stable. Take-profit is one of the bases of the strategy, it must be as big as possible while keeping an optimal success ratio.
I think the risk aversion rating (La) is not suitable for a very short term strategy like mine.
On the other hand, it is true that this score can be very important for a long-term strategy. Because a bad score often means that the trader has no real exit plan, or that he refuses to be wrong and waits for the market to finally say they are right. Even if the trader always ended up being right, the time factor would be too penalizing to make a strategy of this kind interesting. Not to mention the fact that it is not certain that the portfolio will resist.
But for a short-term strategy, the stakes are different, it is only a matter of leaving a few hours to a scenario to see if it is realized or not. The main interest is then to make the most of an opportunity while limiting the number of trades to save on spreads and commissions. Because these expenses represent here a very important part of each trade.
From my point of view, the risk I take is mainly defined by the very structure of my strategies, such as loss limits by trades, position and days. These limits, if clearly set and respected, are in my opinion a much better indicator of risk than the rating of (La).
What is the most important lesson you have learnt in your trading career?
It is difficult for me to choose a lesson in particular, the experience is a succession of lessons, each one has its own importance. Errors are part of the learning process, the heavier they are, the more they mark the spirit. In my opinion, they are often essential to progress.
But since we have to give a lesson in particular, I would say that it is important to realize that even the best strategy that can exist can not resist if it is not applied with method and rigor.
When I started, I often had periods of losing money with winning strategies. The reasons were multiple, but the main one was that my money management was non-existent. It was not even because of the greed but rather by negligence.
As a result, when a strategy gave very good results over a period of time, I would increase the number of lots disproportionately and vice versa. And this, in a completely arbitrary way.
At that time, I had invested a small amount that I was not afraid of losing, and what mattered most to me was the result of the fixed-lot strategy and not the benefit I got from it. Before that, I was already aware of the importance of money management but this experience showed me that it was as important as the strategy itself, or even more. This lesson was invaluable to me when I decided to invest larger sums.
Finally, any comment you’d like to share with the fellow traders who read this?
I am happy and proud to be part of this fabulous adventure that is Darwinex.
It is a great pleasure to be able to compete with others in a fair way thanks to the standardization of the DARWINs. Especially since there are some very good traders among us.
The Darwinex community is very rich, it is composed of many passionate and very involved traders. I’m sorry I’m running out of time to participate more actively on the forum, but I just check it every time I have the opportunity. This community is valuable because we certainly all have things to learn from each other. Especially since we are not competitors but rather a team, the success of each member is favorable to the entire community.
Thus we will have an offer of increasingly broad and rich DARWINs, and more and more investors will give us their trust.
To all traders who struggle to get a result: do not despair, work is rarely futile provided you are persistent, rigorous and methodical.
As for others, congratulations! But be careful never to take anything for granted, no one knows what the future holds. It is likely that a fixed strategy can not withstand indefinitely, it must be adaptable.
Thank you for reading and good trades to all!