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WFB - Wensfer Multi-asset

Hello fellow Darwinians!

I joined Darwinex over a year ago to build a full-year track record. It’s on Fire now so it’s with much excitement that I’m presenting you with my way of trading @ WFB.

From institutional with love

First, a bit about myself. I started out at a commodity trading house in London, where I learnt a lot about market dynamics and order flow. Then I found my calling after I joined the FX industry, and I’ve been trading my own account ever since. 2 years ago I went on on my own as a FX consultant for corporate clients (www.wensfer.com).

Back to Darwinex, I’m no big fan of social trading in general because of the conflict of interest in the way some platforms pay their ‘traders’. I believe traders should have their interests aligned with investors’, i.e. get paid if they can consistently produce alpha. Performance fee is the best way to have everyone on the same boat, and this convinced me to join this community.

Consistency and discipline make the Strategy

The strategy trades all currencies and indices using technical and market sentiment approaches. The aim is to benefit from short term market imbalance and momentum. Trading is manual and of low frequency, as only high probability opportunities are taken. Mechanical rules on entry/exit are used to capture returns and minimise losses.

So what makes WFB stand out? Low drawdown (<5%), high win rate (95%) and consistent return (+30% pa). You might be thinking high return usually comes with higher risk, and high win rate may hide big DD. And you’re right! So my solution to the equation is to prioritise risk and volatility management.

WFB.4.24

Risk mitigation is the secret ingredient

Robust risk management is the edge. I always say that my job is to manage market risk first and foremost, making money comes as a reward. How you manage your downs tells how long you stay in this game.

Optimal position sizing, appropriate leverage and mental stop-loss are things I have borrowed from the institutional level. Hard SL is only used if a trade reaches -5%, and this for a number of reasons:

  • no whipsaws or panic trading;
  • less negative slippage and more AUM capability
  • a strict risk parameter that respects volatility range (breathing room);
  • the percentage is small enough to be recoverable within 1 or 2 trades, which gives the strategy a mathematical edge in the long run.

Enforcing this rigorous yet flexible risk management relies on a deep understanding of market structure and dynamic position management. This trading ‘in the flow’ allows superior risk-adjusted returns through all types of economic conditions. I’m happy that this has so far performed remarkably well during the current financial storm.

Sustainability is my investment philosophy

Have you read Taleb’s Fooled by Randomness? Some grew their accounts exponentially because they were lucky that their strategies worked at that time, or because markets were directional. But then a few setbacks put them back to square one. Others grow steadily and won’t crash even if there’s a black swan.

I’ve picked the second option and developed my trading as a viable personal investment. I’ve seen my fair share of traders making too-good-to-be-true returns, but few could stand the test of time. I have no interest in running a strategy that offers 100% return a year but with a 40% DD. Because it means in a rainy year, you could lose your shirt. A right balance between risk management and alpha seeking is what makes a strategy profitable year after year. This is the reason why I’m only presenting this after a year of live record, so it can be objectively assessed.

That’s all folks! Hope you didn’t fall asleep reading this. I’ll be around for any question or suggestion.

Best regards,
JR

WFB.4.24
Disclaimer: the above information does not constitute the provision of investment or trading advice.

6 Likes

Very nice introduction! A pleasure to have you here and looking forward to follow WFB’s evolution!