QuantStat has been working on his current system since June 2019. He has good stability and is currently ranked #97 in Zulutrade platform. As he notes in his strategy description, he is always looking at the bigger picture (fundamentals and market sentiment) to help him determine the driving force of the market any given time.
The QuantStat account has 18 weeks, generated a 41% annualized Return on Investment (ROI) and 1393 pips Maximum DD. The overall NME is currently at 452$.
Let’s meet him and see what he has to say about his engagement with ZuluTrade.
• Tell us about your trading background and how you got started trading.
Although I’ve got a background in finance (under-graduate and graduate degrees in economics) I used to work in different, non-trading related roles (IT and management) after graduating college and only got exposed to (Forex) trading by “accident”. It wasn’t until about ten years ago when my company got hired by a Quant firm to provide code for one of their algorithms they had been working on for 2 years (we were hired to integrate statistical analysis such as linear regression models into their algos). Working on this project really intrigued me and I almost immediately began to develop an intense interest in the Forex and stock markets and having a background in economics helped me immensely right from the start as I was already familiar with a lot of the fundamental stuff moving the markets. The first 2 years were still hard though and I certainly paid my dues but starting from year 3 I finally got the hang of it. I’ve been trading now for more 10 years now but I still treat every day as day zero and am still excited about learning new things!
• When did you first discover ZuluTrade? What was it about ZuluTrade that got your interest?
I discovered Zulutrade almost 2 years ago but didn’t really pay much attention to it until about 6 months ago when I became more interested in social trading after being approached by a different social trading platform. I think social trading has a lot to offer for both investors and traders provided that both parties (investors and traders) act responsibly and do their due diligence. Investors ought to select their traders carefully and follow solid money management while traders should always try to minimize potential risk and exposure as much as possible and refrain from relying on strategies deemed dangerous (martingale, grid, etc.) in order to protect their follower’s capital at all times. Minimizing risk should always come first and should be more important than profit!
• Give us the basic structure of your strategy
I’ve slightly adopted my strategy for Zulutrade in order to minimize possible slippage. While my main strategy mainly relies on long term trade setups I’ve also incorporated short and mid term trades to supplement my long term trades. This means that I incorporate both long term trades (which are mainly based on fundamentals) and medium/short term trades into my strategy. My long term trades are mostly based on various fundamental outlooks (yield rate differentials in form of central bank interest rates, economic strength of countries (gdp), employment development and various others) while my short and medium trades are mainly based on price action trying to take advantage of oversold/overbought opportunities in the markets. I use technical analysis for entering a trade (major support/resistance zones, trend lines and moving averages) but I rarely rely on technical indicators (RSI, stochastics, macd, etc.) as those are merely mathematical derivatives of price itself (so called lagging indicators) and if I’ve learned anything over the years it is that price action is king. Additionally I also incorporate carry trades into my strategy to take advantage of yield differentials (e.g. long USD/JPY and short EUR/USD). Carry trading allows for constant returns when trades are left open for months and can result in substantial gains, particularly when trading with bigger lots (10 + standard lots).
• What’s your trade management approach – taking profit and exits, trade size and account- level risk management?
I deem risk/money management to be the most important part of any trading strategy and I can’t emphasize the importance of following responsible money management enough! My main account which is linked to my Zulutrade ICMarkets account via a bridge (Zulutrade does not support Interactive brokers as of yet so I have to use a bridge) has a trading balance of 100 000 USD and my maximal draw down never exceeds 10 % of my total equity (in this account I mainly trade between 1 – 5 standard lots). When I enter a trade I always think about how much I can potentially lose and not how much profit I can make and this mindset has allowed me to never get margin called in more than 10 years.
I trade carefully and never aim for unrealistic returns like some other signal providers that make it to the top and then crash within less than 12 months. In a market as risky as Forex you should always focus on long term results; if you focus on excessive short term gains you’re risking a lot and will only end up blowing your account.
I aim for very conservative profits (3 – 10 %) per month with minimal risk (this is more important to me than actual profit); some months I will fall short and some months I will overshoot and some months can be even negative but that’s not a problem for me at all as I’m in it for the long haul.
I can not and will not guarantee unrealistic returns but I can promise my followers the following:
– I will not gamble with your hard earned money just for the sake of generating commission.
– You will not wake up in the morning to discover that 25 % of your account has evaporated.
– I will not use dangerous trading methods known to increase risk exponentially (martingale, grid, etc.). For my short term trades I may open up to 4 positions within a short distance if the position goes against us, but this is not a classical martingale as the lot sizes stays the same.
– Protective stop losses are always in place to avoid any sudden negative movements. Also I don’t hesitate to close a trade prematurely if the reasons/market conditions for taking the trade have changed considerably in order to minimize potential losses.
• How can your followers get the best by your strategy?
If my followers stick to responsible money management they can follow me long term without ever risking their accounts. I recommend at least 500 USD per 0.01 lots (= 1 microlot) and since my maximum draw down never exceeds 10 % of my total balance or 1500 pips the maximum amount one would lose when following me with 0.01 lots would be about 150 USD in case of a DD of 1500 pips.
• How do you feel when you have a good and a bad trade? How are you dealing with this?
I don’t feel anything because when you trade you have to keep emotions out of the game all the time! The answer is simple, when a long term trade goes in our favor we let it run and when it goes against us, we close it and cut our losses short. For short term trades, we aim for small gains (usually around 20 pips) and when the trade goes against us we may open up to 3 additional positions but when the trend goes against us, we close all the trades. I know that losing a couple of trades in a row is painful (not just financially but also emotionally!), but incorporating responsible stop losses is absolutely necessary in order to manage risk properly and it’s all about long term results anyway! The only thing I’m asking followers is to remain patient and don’t panic when a losing streak occurs, just focus on long term results (at least 6 months) and you should be fine.
• Finally, if you could give some advice for the aspiring traders out there, what would it be?
Try to learn as much as you can about the markets and always try to keep emotions out of trading! Try to gain as much experience as possible (this means screen time before charts) and if possible stay away from risky trading strategies. Last but not least ALWAYS follow responsible money management and NEVER over-leverage!
That was all from QuantStat. More Traders’ Interviews to follow…Stay Tuned!