How to build a resilient trading system
Tony Camilleri
Director and partner at Emas Ventures, Gold Trader. Over 11,000 followers. PAMM manager. Fund manager. Day trading the Gold spot price.
When building the 4xfusion trading system, I decided that I wanted a trading system that can be resilient in all trading conditions.
Whether or not the markets are trending, going sideways or in total market turmoil, as has been the case during the past 4 weeks with the coronavirus.
We have seen massive moves, large gaps and a lot of panic buying and selling.
This has been a great time to test the resilience of the 4xfusion trading system.
How has it gone so far?
55 trades
0.78% drawdown
4% gain.
Building a resilient trading system and algorithm has not been an easy task and was met with a lot of failures in the early testing.
Having been a trader for 15 years and having seen many ups and downs in the marketplace, placed me in a very good place to deal with market volatility.
So how was I able to achieve such a low drawdown during such a period of turmoil and volatility?
I took a multi layered approach to the risk management.
Firstly, the algorithm executes the trades, which totally removes emotion and any revenge trading from the system.
Secondly, every trade taken, always risks 1% per trade, the algorithm ensures the lot size and stop loss placement is always correct.
Thirdly, the trades are always checked by the trade desk, if the trade is not correct and will be quickly closed.
Lastly, the algorithm is always monitoring all the open trades and if accumulated losses are over 1%, it will close all trades and reset.
Happy trading.
Tony Camilleri