In May, our portfolio on Darwinex peaked at 44.66% return... the next month or so, the portfolio started to drawdown. As a financial trader, drawdowns are part of the normality of trading.. as an algo trader, you need a big enough sample of results to see if the algos within the portfolio are failing due to changes in the market structure. Unfortunately, this does mean eating more losses until they fall outside the standard deviation.
And when this happened, it was time to get to work... time to identify which algos were no longer working so we can scale them out and which ones, out of a pool of 300+ in our incubation accounts, to scale in.
For all our algos, the backtest results are where we derive the standard deviation data from... average and extremes of wins to losses, number of trades, expectancy etc. As markets change, the behaviour of the algos and their profits will change and when it's not profitable, it's time to scale them out.
Our incubation accounts are always running... 300+ algos and always growing, these are trading live in relatively small live accounts so we can always track their progress no matter what the market is doing. Their results are tracked daily and ranked... the ones which bubble to the top are the initial candidates. However, we do need to know what other pairs and strategies are in the portfolio as we never want to be be overweight trading in any particular pair or strategy... diversification allows the spreading of risk within the portfolio.
Anyway, we removed 4 algos the portfolio and a similar number proven to be effective in current market conditions were scaled in. As a result, the bleeding stopped and we started to move back into the right direction.
And today, I'm pleased to tell you that the portfolio is now back to our previous all time high - we've effectively climbed out of the drawdown.. like we have in every previous situation.
We never totally discard any algos.. if they worked before, it's most likely that they will work again.. they continue to trade in the Incubation accounts and should they start working again as they had at a previous time, they will be candidates to go back into the portfolio.
The portfolio is with Darwinex and their platform has allowed us to share our performance with investors in a fully regulated manner. And not just any regulation, Darwinex is regulated by the UK's Financial Conduct Authority (FCA) offering maximal protection to clients. If you or anyone is interested in investing in this, you can learn more by following this link --> https://www.darwinex.com/invest/YFC
We're also currently ranked 13th out of 4287 other portfolios this month:
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