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IRY - FedericoSellitti - Semi-Automated System

Hi everyone,
it’s weekend and I can finally dedicate some time to introduce my Darwin IRY and myself :grin:

First of all, before you read, let me say that I have published a video about me and my Darwin, so, if you prefer listening over reading, feel free to have a look: https://www.youtube.com/watch?v=RY0_J9VHWsU&t=12s

My name is Federico Sellitti, I’m from Italy (although I live in London and usually spend more than half year travelling), I’m 29 and it’s very nice to meet you.
I’ve been a Forex Trader since 2007, opening my first account on eToro with my mother’s name, because I was still 17 :smile:
I don’t want to bother you talking about how an excellent trader I am or how many millions I make every month, just want to highlight very quickly my background.
My adventure in Forex Trading didn’t start well, but I managed to grow my account since 2007, quitting my job in 2013, becoming a full time trader. What else about me? I’ve joined the University studying Statistics for the Financial Markets. I always say that I’ve been very lucky in my life, because at the time I had to choose what to study at the University, I was already very passionate about Forex Trading.
I have been writer and contributor for a financial magazine. I had a short period between 2018 and 2019, at the HSBC, working on a project about trading.
In the second half of 2017, I started to share some of my strategies and systems on Udemy.
I have a YouTube channel that I mainly use to analyze the market and reply to questions from my students. I don’t monetize it, I do it just for fun, although recently I was thinking about giving back to the community by enabling ads and giving all the revenue from YouTube to followers, organizing something like trading competitions. Ok, I’m going off-topic :grin:

About my strategy. IRY is my Darwin based on a system called ALM-TCS. It is a semi-automated system that I also share in one of my courses on Udemy, so everything 100% transparent about my strategy. It’s a system that has been back-tested since 2013, forward tested for the whole 2019, for a total of 3455 trades (only on GBP/USD. In the course, I also consider the other majors and minors and give results for them).
I use the system only on GBP/USD because of several reasons:

  1. It’s been the one that performed at the best since 2013;
  2. Since the system is trend-catcher and performs better with high volatility, GBP/USD offers better conditions than some other pairs like EUR/USD;
  3. GBP/USD spread is, most of the times, better than other pairs like GBP/JPY;
  4. GBP/USD has, most of the times, more liquidity than other pairs, this means less problems such as spread widening and slippages, especially during the overnight sessions.

“Ok, everything amazing. A trader with experience, a system that works. Great, let me invest 2 million in this system”.
Right now, in November 2019, I’m the first one to tell you that my Darwin is far from being one of the best here on Darwinex and you can find something better. The reason is that I just joined a couple of months ago and I’m a newbie on this platform. This means that I don’t completely understand and master important concepts like divergence or risk manager. This lack of competence would not affect my system, but could affect your investments.
I’m working a lot on it and also tracking my Darwin from a demo portfolio, but, at the moment, I can’t say that I know 100% of how Darwinex works and, for sure, I have a huge room for improvement on this.

WHY ARE YOU ON DARWINEX?
I have two main reasons for it:

  1. I want to provide my students with a track record that they can follow over time, without constantly watching my updates in my Udemy courses;

  2. I want to provide my students (and others) with the opportunity to make some money, without actually working as a trader. I get many times messages like: “The market moved very fast and I was at work, unable to adjust my orders” or “I’m very busy in this period of my life, I guess I should focus on daily charts and check my account 10 minutes per day”.
    Many people don’t have the time to take care of their Forex business. Many others just love their job and don’t want to dedicate more than 10 minutes per day to take care of their trades/investments. So, for all those people who were and are interested in the system, but don’t have time, I opened this account.

I want to clarify that I also share my investor password in one other YouTube video. You can find it here: https://www.youtube.com/watch?v=FTvxvzZ8z4o&t=2s
If you have time, you can just log into my account, copy my trades without investing in my Darwin. You will get 100%, without giving me the 20% fee through Darwinex.
I’m not interested that much in having millions as AuM. I trade my own accounts even outside Darwinex. I’m happy with what I make, I’m happy with my life, I’m happy with my $20 t-shirt and I don’t feel the rush to become a multi-millionaire.

If you have any question, I will be happy to try to answer at my best. Meanwhile, have a great trading day :slight_smile:

11 Likes

Hi Federico,

I’ve noticed you’re also active in other topics in this community. Always great to see active members!
I’ve had a brief look at your IRY and the thing I always look at first seems to be in order on your account: On average your winners are bigger than your losers and your winrate is higher than 50%. For me, that’s a formula for long term succes. Now it’s just a matter of adding to your trackrecord (like all of us :wink: ).
Keep it up, and good luck with your trading!

4 Likes

Thanks a lot Renko!
Regarding winners bigger than losers, it will always be like that with the system that I use.
Regarding win rate above 50%, it is weird to say, but it will drop when the system enters a better period. Let me explain, because it may sound as a contradiction.
The system has no take profits, it moves the stop loss every time the price moves x pips in favour of the trade. A sort of manual trailing stop. At the moment, GBP/USD is not having any strong trend (almost one month and a half between 1.28 and 1.30) and it’s been like this since I launched my Darwin IRY (not very lucky) :smiley:
With strong trends, sometimes the system is able to catch 300 or more pips, that will be shown as a huge win, but counted only as one win. While in ranging periods, we might have several small losses. This will lower the win%.
Overall, the system should have a win% between 40 and 50%, always keeping wins equal or bigger than losses. Take this current 52% as a fake figure due to the youth of the Darwin :smile:

5 Likes

Hello traders, investors and normal people :smiley:
I wanted to share with you the performance of my Darwin IRY, for the month of November 2019.
As usual, I posted a review on my YouTube channel, so if you prefer watching/listening to it, feel free to go through the video: https://www.youtube.com/watch?v=aUmG3OKnPfo

November has been a tough month for my trading system. To be fair, I should say that the first 25 days have been nothing special, with the return that was just swinging between -0.30% and +0.50% most of the times. This low return, whether negative or positive, was mainly due to a lack of volatility.
Last week of November has been a disaster, with 5 days out of 5 closed with a loss!
This brought the performance down and we closed the month with a -1.99%.

Except for the trading perspective, with last week that has been very negative, I also want to analyze some negative and positive aspects of the month of November.

Negative

Of course, I have to include results in the negative column. I can say that this is a temporary period of drawdown, I can say that I totally know what I’m doing, I can say that the system has been backtested since 2013 and proved to be profitable. All nice words, but what really matters is to deliver good results. The month of November has been a negative one. End of story. I go on following the system 100%.

(I open a small bracket here to say that I do invest a lot in research for my trading, even for the system that I use here on Darwinex. This is mainly to find small nuances that could make the system more profitable, less risky, or just improve it in other areas. Having a bad trading month is very far from being a reason to change even the slightest thing in my system, so no change needed so far).

Positive

I am quite happy about other aspects of the month of November:

  1. Drawdown under 8% and return at -2.50%. Currently, the maximum drawdown is at -7.82%. Considering that the system just faced (or still currently facing) a bad trading period, having a drawdown below 8%, with a return of -2.50% in this period (end of October + whole November), is a sign that the system is pretty solid during negative periods and can really keep the risk at low levels. Now, it has to prove that it can maximize profits when it runs in a positive period. Let’s hope it can prove it very soon :smiley:

(I have to open another bracket here. Soooo sorry about that. When I opened my account, in my profile, I wrote that the system could potentially achieve, as a realistical expectation based on results since 2013, a profit above 20% per year, keeping the maximum drawdown below 8%. This was before discovering how VaR works for investors. Now, I have changed that and I wrote that the system could potentially achieve a profit above 25%, keeping a drawdown below 16%. Real figures should be a yearly return above 34%, with maximum drawdown under 14%, but I like to under promise and over deliver :slight_smile: )

  1. I start to get the hang of Darwinex parameters, especially the ones that affect investors. I’ve been spending my last 2 months reading, watching Darwinex’ YouTube videos and asking a lot here on the Forum (thanks @CavaliereVerde for the links to the Risk Manager). I finally can say that I understand 90% of how Darwinex works. I’m also exercising predicting how my Darwinex attributes will evolve day by day. Things like “VaR is calculated on 45 trading days. So my Rs is dropping because my Darwin is just passing through the first 45 trading days, but it should start to increase day by day after that” and magically seeing that, after 45 days, my Rs is really increasing day by day! Feels very good and I can say that this was my weak spot and a potential threat for future investors, but I’m glad that it is becoming one of my strengths.

  2. I shared a third positive point in the video, related to a software that I give in the course about the system I’m using. I wouldn’t know how to share this point here, but I will just say that the software also shows that we are slowly getting out of this bad trading period. Maybe a point about that is that December started with a +2.02%, that is more than our loss for the month of November, but I seriously don’t like to talk about December now, because we still have a long way to go.

Well, I think I have covered all the main points for the month of November.
Wish you a profitable and happy December and I’m here if you have any question!

Federico

4 Likes

Really like your style and also your youtube channell :

https://www.youtube.com/channel/UCtCgwDW4kpVuBQVoUYJTmig/videos

Really a lot of good educational content but it seems to be 100% about manual trading.
Here you are speaking about backtests and semi-automated, so where is the material about automated/algo trading?

1 Like

Hi @CavaliereVerde, thank you so much for the feedback and the kind words :slight_smile:
The semi-automated system is on sale on Udemy. Not sure if I can give the link to my website here, I try, otherwise I apologize for posting commercial contents: http://quoraforexquestions.com/education/

The system I use here is a combination of “FOREX TRADING STRATEGY: A COMPLETE SYSTEM WITH LIVE EXAMPLES” and “FOREX TRADING STRATEGY PART 2 - ADVANCED ALM-TCS PROGRESSION”.

On my YouTube channel, I tend to talk almost exclusively about my discretionary trading, because following a system is easy, it’s just a bunch of rules, but technical and fundamental analysis of the market is harder and results are not the same for everyone. It’s a sort of gym for traders who enrolled in my courses about discretionary trading. I post my analysis there so traders can compare their analysis with mine. If someone wants to talk about a different currency pair, he/she usually just sends me a message on Udemy or open a thread in the community, so I can reply there :slight_smile:

1 Like

I wanted to thank the first investor in my Darwin :slight_smile:
I see your money invested and wanted to thank you for your trust.

A very small update, since I’m already writing a message here.
The system is currently facing the market with a low risk for two reasons:

  1. We are coming from a very important winning streak, that lowers the risk in the software I use;
  2. It’s an important week for GBP. Since I trade GBP/USD, I expect the spread to suddenly increase during possible strong movements, so… safety first :slight_smile:

Happy trading to all of you!

4 Likes

Hello everyone,
we are in 2020, this means that it is time to update the thread and talk about the results of last month: December 2019.

Before going on, as usual, I want to share the YouTube link with you, so you can also choose to have a look at the sum up of December 2019 through video support: https://www.youtube.com/watch?v=1J_dhmYmtIQ

  • The first thing that I want to say is: THANK YOU. The Darwin now counts 5 investors and I would like to thank every single one of you for trusting me and my system with just 3 months of history. In my Udemy course about this strategy, I share results from 2013 (also updated the results for 2019), but sharing results and proving results are sometimes different things, so thanks again for joining IRY.

  • Regarding the results, we closed December with an outstanding +11.49%

I started the Darwin in the middle of October, so you cannot see results for the previous months of the 2019, but I can tell you that December 2019 has been one of the best months of the year.
It is important to set the right expectations and understand that my strategy is focused on the long period, it doesn’t try to get a 2-figure %return every single month.
I don’t want to create any misunderstanding due to a month that went better than expected, so I write again what I already wrote in the description for the Darwin:

This is a semi-automated system, trading only on GBPUSD, both directions. Back-tested the system for the past 7 years, + forward-tested it for 1 year, we should be able to achieve a return above 25% per year, while keeping the drawdown below 16%.

  • At the beginning of December 2019, I was analyzing the month of November. We were coming from a bad period of 1 month and a half, in which we had a loss of 2.59%. I stated that, although I was not happy about the negative period, I was quite happy about the results. The system went through a bad period, keeping the loss at -2.59%, with a drawdown of -7.82%. I said that I was happy that the system proved to be solid during tough times, we had to wait for a positive period to prove that the system can maximize profits. I think that the +11.49% that we had in December, is what we were waiting for :slight_smile:

  • It’s always good to check every single detail of your strategy and your work, especially when there is other people’s money in the game. Even after a great trading month like December 2019, I have to say that I see a negative side and I’m already working on it. I’m talking about the VaR.
    In a video on my YouTube channel, I mentioned that, during the Christmas period, I was going to trade with lower volume with all my accounts, not just on Darwinex. With Darwinex though, it was quite clear that trading with lower volume for a few days meant reducing the VaR for the month of January and part of February (since VaR is calculated on 40 trading days), exposing the investors to a higher risk (and, of course, a bigger potential profit).
    So the choices were two: reduce the volume of trading or stop trading during the Christmas period.
    The first one would have exposed investors to a higher risk in January-February, while the second one meant giving up on some good market opportunities.
    I decided to be in the middle of them, trading with a lower volume only on very good opportunities, staying totally out of the market in some other days.
    From the profit side, it’s been a good choice, since we caught some other trades that gave us a profit. From the risk side, now we have a VaR of 5.56% in this beginning of January, with a standard VaR that used to be around 6% for the month of December and, generally, between 6 and 7%.
    To put this in simple terms, this means that risk and profits will be slightly bigger than normal for a few weeks. How bigger? A profit/loss of 1% before, is now a profit/loss of 1.08%.
    So you can see that it is nothing big and we avoided to increase the risk significantly, while still taking the profits in December, but it would be great to have this under control in another way. I hope that Darwinex will do something about it before next Chrstmas :slight_smile:

  • First week of January seems to start in a tough way, but you know that I never like to talk about the current month. I only had 3 trading days so far, what can I possibly say about it?

If you are one of my investors or potential investors (well, even if you’re not), I understand that you might be concerned for every single day in which you see a negative return. I might analyze the results only at the end of the month, but I’m here for any question, doubt or criticism. They are always welcome.

I hope you started the 2020 at the best!

Federico

PS: I will live stream on the 14th of January on my YouTube channel. I will not use the account on Darwinex to trade and I will not use the same strategy that I share in my Darwin IRY, but there will be a live chat that you can also use to ask about my Darwin. It’s a nice way to ask questions so I can reply instantly, or just to say hello and get to know each other better.
This is the link: https://www.youtube.com/watch?v=KgarszjjaHI

I hope to see you there :slight_smile:

5 Likes

Hey Federico,

I might join as a fellow trader :slight_smile:
What time does it start?

1 Like

That’s great :slight_smile:

It will be on Tuesday, 14th of January, at 10:30 AM (UK time).

This is the reason why 99% of teachers do not share their results and trackrecord. :wink:

4 Likes

This is why 98% of „traders“ start selling books and courses :wink:

3 Likes

Hello traders and members of the community.
Today is the first day of February, so it’s time to talk about our previous month of trading.

You can watch the video here: Darwinex Account - Review of Trading Month January 2020

I start to have a few questions about my Darwin, so I will first go quickly through the analysis of what happened in January and then I will answer some of the questions.

Before starting, I would like to thank all the people who decided to invest in my Darwin and all the people who showed interest (and respect) in this project. Your trust is the most appreciated reward for what I’m doing here on Darwinex.

Performance
January has been another good month, with a return of +3.12% and an overall return (since October 2019) of +12.00%.

If we analyze the candlestick chart of my Darwin, for the month of January, we can appreciate the stability of the system:

Return of 3.12%, with a drawdown in the past month that has been -1.68%. No major swings, only 2 “big” red candles during a sudden spike in the first half of January and another “big” red candle on the 24th of January, due to a news that moved the price fast against our trade.
This last candle is the biggest loss we had in January, in a time frame of 4 hours. We are talking about -1.14% as our major downswing, so, regarding the risk and the return, I can say that I am pretty satisfied and happy about the behavior of the system for the month of January.

Darwinex attributes (related to investors)
In the past months, I have expressed several times my concern about Darwinex factors that could affect investors. In particular, I mentioned VaR and Divergence.
I have studied a lot, trying to be active in the community, watching the new amazing videos in English on Darwinex’ YouTube channel. I have also sent several emails to Darwinex support to ask for their help to monitor if everything is ok for investors of my Darwin (I must be the most annoying client for them :rofl: )
I believe that everything is under control, but I want to spend a few words about divergence.

divergence%20darwinex

You can see that monthly divergence increased to -0.51%, that is not something I would like to see.
This increment is mainly due to the activity in the last part of the month.
As you know, my system is based on GBP/USD. At the end of the month of January, we had the interest rate decision (on the 30th of January) and the Brexit day (on the 31st of January).
In particular, divergence increased dramatically with 2 positions I had on the 30th of January.
The first position hit the stop loss, but the stop loss for investors was executed 13.2 pips far from the real level (that worked for my personal account), resulting in a higher than expected loss.
The second position, was a stop entry order right were I had the stop loss for the previous position. Same story, this position was executed with an entry price that was 13.2 pips far from the real level, that, once again, worked for my personal account.
At the end, I closed that position with a profit of 163 pips, that has been a profit of 149.8 pips for my investors.
These two positions explain the increment of divergence that we had in January.

Overall, I don’t think that this one time episode is a symptom of a problem for my Darwin, but I will keep monitoring the situation in the following months, even thanks to the help and support of the Darwinex community and staff.

I would like to analyze some other points, but I think that I can do it through two good questions I received in the past month.

Question 1

first%20question

Good question and I would like to post a screenshot of my VaR so we can check what we are talking about:

Let’s exclude the kind of cloud that I had till the end of November, since it was the effect of the youth of my Darwin :slight_smile:
Recently, my VaR is going down, am I really decreasing the risk with my personal account? The answer is NO.
I believe that the VaR is going temporarily down due to 3 reasons:

  1. The calculation is made on 45 active trading days. The VaR calculation left the month of October 2019 (73 trades) to welcome the month of January 2020 (27 trades). Less trades means less volume and less risk exposure, according to the VaR calculation. Risk per trade for my system is calculated in the same way and there have been no changes in it;

  2. As mentioned in previous posts, I traded last period of December 2019 with a lower volume. This contributed to push the VaR down;

  3. We had an impressive positive streak in December 2019. The risk calculator for my system tends to slightly decrease the risk per position during exceptional streaks, whether they are positive or negative streaks.

So, my final answer is: no, I didn’d decrease my risk and I’m not planning to do it :slight_smile:

Question 2

darwinex%20question%202

This is a question that I’ve been waiting for a long time, so thank you :slight_smile:
We need to separate expectations from guarantee.
The system has been back-tested since 2013. For every single year, it gave a good profit.
In 2019, I have applied the system with my personal account and it has been another great year. Some students of my courses applied it and they had a great year.
I have applied it here on Darwinex since the second half of October 2019, and we are having good results.
Do I have a positive expectation based on real facts? Yes.
Can I guarantee that the system will be profitable in the future? Absolutely not.
I am a trader, not a magician. I cannot guarantee for the future.

I want to take advantage of this question to say something. I cannot promise to have a positive return in the future, I believe no one can.
My promise is that I will keep trading responsibly, keeping the risk low and without giving you swings of -10% in a single day or -20% in a single week. This allows you to have peace in your mind and evaluate whether or not to hold your investment in my Darwin on a weekly basis, without suffering major losses due to irresponsible risk management.

This is my analysis of the Darwin IRY for the month of January 2020.
As usual, if you have any question, feedback or criticism, you’re welcome to post it here in the thread for my Darwin.
I always try to reply at my best (unless your comments are about unwanted challenges :rofl: )

Enjoy the weekend and enjoy next trading month!

Federico

6 Likes

Hello @FedericoSellitti congrats on your early success on your Darwin. With your current VAR being 3.41 does this mean each trade you risk 3.41 of equity or this total daily risk across all trades daily. Thanks Noel

1 Like

Hi @noeljames, thanks for your kind words :slight_smile:

VaR is a risk measurement.
It answers the question: “if we exclude any catastrophic case, what’s the maximum loss that the trader could have during that period?”.
3.41% is the answer.

The VaR has an interval (95% here on Darwinex) and a period, that is 1 month here.
So a VaR for my account of 3.41%, says that there was a 5% chance to lose 3.41% or more with my account, during the last trading month.
There was a 95% chance to perform better than -3.41%.

To put it in simple terms, the VaR says that a trader has 95% chance of performing better than that parameter over the next month.

I’m very far from these numbers regarding my risk per trade or my daily risk :slight_smile:
I use a software (that I created) to calculate risk per trade. It generally goes from 0.20 to 0.60% per trade. Very rare to see something higher than that.

Hope it answers your question!

Federico

4 Likes

Thanks @FedericoSellitti for prompt response

I see you have a very impressive 62% successful trades at the moment. What variance have you found on this success rate on your trading in the past?

Thanks

1 Like

@FedericoSellitti does the Darwin platform not show the risk per trade taken by a trader or how would an investor know if the trader has really increased their risk (would this be reflected in the VAR value?) Thanks

1 Like

The real win% should be a bit lower than that. I sometimes reduce my exposure to the market, taking part of my profit. When I remove a small part of my position, it is counted as a win and it increases the win% here on Darwinex.
Real win% should be around 56%, that is still above 53% that is the long term win% expected for this system.
So, good results so far, but also helped by a slightly favorable period for the system :slight_smile:

I personally use 2 methods for that:

D-Leverage

You can find it right under the monthly results for the Darwin. It’s not a measure of a risk per trade, but I think it’s a good parameter to track the overall risk of the trading activity.

Rs and VaR

In the Darwinex attributes you see at the top, there is one called Rs. If you click on it and scroll down, you have a representation of the VaR as a form of cloud.

Generally this is another way to check the risk, but not the risk per trade. It is slower than checking the D-Leverage, because it might take a while for it to react when trader is increasing the risk.

Maybe some other good traders/investors here on Darwinex have other good ways to track the risk :slight_smile:

Regarding my Darwin, I share the investor password with everyone, so you can check all my trades live, even from your mobile phone. This video might help: https://www.youtube.com/watch?v=FTvxvzZ8z4o&t=51s

Federico

1 Like

Dear investors and members of the community,
here is an update for the trading month of February 2020.

You can watch the video here: https://www.youtube.com/watch?v=AQ_AOWknxao

Investors
A huge thank you, for all the people trusting my trading activity.
Currently 16 investors, some of them also getting in touch through Facebook or email, even just to say hi. Loving it and I promise I will keep doing my best and trading in a responsible way.

Performance
We closed February with a good +4.88% and an overall return above 17.00%.

But I would like to focus on a parameter that really stood out in the month of February: Drawdown.

Profit: +4.88%
Number of trades: 28
Wins: 18
Losses: 10
Drawdown: -0.68%

In a month in which we have talked a lot about sudden 2-digit falls, volatility increasing, Coronavirus altering the market… I believe that drawdown at 0.68% has been the most important result.

Divergence
In January, the Darwin reached a divergence of -0.51% and I commented reporting two exceptional positions that were responsible for that.
As I expected, they were two exceptions and the Darwin came back within normal parameters.

divergence

One of the goals for March is to monitor the Target VaR for investors.
It has been around 5.50% in February, dropped to 5% at the beginning of March and… guess what? We had a bad start of the month, right when Target VaR was at 5%.

I do understand that Darwinex does all of this to protect investors, but sometimes it still feels annoying. Risk management is a very important part of any trading strategy and I believe that this VaR mechanism helps to protect investors from bad traders and gamblers, but it is a restriction for good traders.
Since I believe I know what I’m doing and I have a very high respect for other people’s money, I would like to manage the risk the same way I manage it in the underlying strategy.
I guess it is not possible, we are on Darwinex, we play by their rules. So my goal is to monitor the target VaR in March and continue to pursue the best way to trade for my investors.

I have had several questions for the past trading month, but I already answered all of them. This makes my review of the month of February quite short :slight_smile:

For any question or criticism, feel free to post here. I always try to reply at my best.

Wishing you a great trading month.

Federico

6 Likes

32 posts were split to a new topic: How to get the DARWIN manage the risk the same way I manage it in the underlying strategy