Which equities trader do I keep?
So the main question in this update is whether I swap my current equities trader for a new one. At the moment, I'm copying Chocowin for my equites. He's been doing well, but his risk profile is a little high for my goals.
I've been watching a trader called 'Harshsmith' for some time now. His risk scores are lower, his performance is good, and I'm thinking of switching to him. But first, I go over some of the polls from my previous videos...
Poll Results on which traders to copy
Recently, I've been putting out some of those "Would you copy this trader" videos. It's been a good way to go over some of my viewers' suggestions and also let everyone have their say. Polls are really useful for this, as it lets all future viewers see how other people are thinking...
So here they are:
1. VIDEO: "Would you copy Berrau"
Yes: 54%
Add to watchlist for now: 21%
No, he's too boring: 18%
No, he's too risky: 5%
2. VIDEO: "Would you copy LoydBazaar"
YES: 40%
Add to watchlist for now: 37%
Not sure: 15%
No: 6%
3. VIDEO: "Would you copy Kela-Leo"
Yes: 53%
Add to watchlist for now: 12%
Not Sure: 20%
No: 14%
Now, I know this isn't scientific 🙂 I asked slightly different questions, and gave different options for answers. So take this as a rough indication and a bit of fun... Always do your own research before deciding who to copy!
Back to Harshsmith VS Chocwin
So, as I was saying, I'm looking at changing the equities trader I'm copying in my portfolio. Why?
Chocowin's done very well for me, but compared to Harshsmith, he's high risk. My goal is to have a low risk portfolio. I've set up some mini informal rules to achieve this goal.
One fo them is about 'Max Drawdown'. This is a metric in eToro's stats which measures each trader's maximum drawdown in the last year. 'Drawdown' can almost be equated to a 'losing streak'.
It basically describes the biggest loss you made before you started making gains again. It's like looking at a dip in your profits - how far down did the trader let it go before:
A: Cutting off the losing trade
or
B: The markets turned around and the losses stopped.
I use it to get a rough idea of whether a trader is likely to trigger my 15% Copy Stop Loss. I'm setting my Copy Stop Loss (CSL) at 15% for every trader I copy so that I don't risk too much of my capital. But I also try to pick traders who's history shows that they're unlikely to trigger my CSL.
I don't want to set such a tight stop loss only to have it triggered constantly. That wouldn't make any sense. So I watch their stats...
Chocowin's Risk Scores and Max Yearly Drawdown
Here you can see chocowin's risk scores for the last twelve months as well as Max Drawdown stats. If you compare them to Harshsmith's (shown below), you'll see that the risk scores are higher throughout the year.
Underneath the bar chart, you can see the Max Drawdown section. The number at the right hand side of the box shows the 'Yearly Max Drawdown. As you can see, chocowin's is above my 15% target, whereas Harshsmith's is well below...
Harshsmith's Risk Scores and Max Yearly Drawdown
It seems starnge to stop copying a trader who has made me good profits. It's all about sustainable, low-volatility growth in future though. That's my primary goal. If I put $20,000 into my eToro trading account, which traders would I want trading with my money?
Both trade equities, both are historically profitable. One is statistically less risky than the other. What would you do? I've asked the viewers, and I'll see what the wisdom of the crowd says. I'm leaning towards dropping Chocowin and copying Harshsmith though.
I don't want too much exposure to equities as volatility seems to be a new norm, and I need to watch my risk. Hence, I'm leaning towards only keeping one equities trader in my portfolio.
How are the other traders doing?
Alnayef
He's at pretty much the same level as in the last update. Not a lot has moved really... There's a lot of red.
Alnayef's not been doing much. He still has a lot of minorly-losing trades open, and he seems to be just leaving them there. He's waiting until they turn green I think. I'm not sure how long that will take. For now, I'll just continue to leave him and watch. Hopefully things will turn around.
He's not taking any massive risks, and he's not doing anything foolheardy. He's just on the wrong side of a lot of trades - but not seriously enough to cause panic. There's just a niggling feeling that he's on a bit of a slowly-losing streak.
Berrau
He's been doing very well. Slow, steady gains - making around 0.25% on each winning trade, with a series of winners lately.
His risk scores and max drawdown are still low, and he seems to be on a good track at the moment. Every couple of days, he opens a new trade. When it wins a quarter of a percent, he closes it and takes the profit. Simple, and clean.
When I first copied him, a lot fo his trades were going against him. He was still managing to trade his way out of it with profit though. Recently, however, all his new trades seem to have been going his way. Long may it continue!
Olivier Danvel
He's pretty much at the same level too. He had a bit of a drawdown at the end of last month, but turned it around to end in profit. He's still got 100% green monthly stats. I'm happy with Olivier, and going to leave him there to do his thing!
Kela-Leo
Kela-Leo's just gone up a little, then down a little, then up a little all month. My profits from the copy trade haven't really moved, so there's not much to say 🙂 Again, I'll wait and watch...