February 14, 2019 A worrying week... This week's been a bit of a worry because of one of my traders - 'Citadelpoint' whose been up and down all week...
He was selling the USD/SEK in a trade using 100% of the money I invested with him using leverage. The trade went the wrong way and he drew down over 3% of the value of my total portfolio in the space of 3 days... Frightening. And as my stats fell, the people copying me fled too.
Will I Continue Copying Citadelpoint?
I do think CitadelPoint is a very clever guy - he has a PHD from Cambridge where he worked on risk volatility forecasting. But this week was scary. His risk score jumped to 8 out of 10k. He was ultimately right in the direction the asset would go, but the way he's trading is just too risky for my current portfolio.
So... I'm currently trying to work out whether to keep him in the portfolio or not. His max yearly drawdown has already gone over the 15% max which I'm aiming for with the people I'm copying... It's not a good sign. So, in order to be bale to keep copying him (i do think he's talented) but be less exposed to his new riskier behaviour, I've reduced the proportion of the portfolio which is copying him.
How are the other traders in my portfolio doing?
That's a very significant figure, but I'm not quite sure what to do about him yet - I'll keep a close eye on him for now and draw down my exposure to him in the portfolio.
I've also been told that he may not have to pay any fees due to having an 'Islamic Account' although I'd need to verify that.
He seems to be trading back-to-front
I think that if he had opened all of his recent trades the other way around, (for instance buying instead of selling, or selling instead of buying) he'd actually have made a ton of money. But there we go - I can't micro-manage his trades, and these guys don't seem to adapt to changing market conditions that quickly, so I guess he'll be sticking with his current strategy for the foreseeable future. I'll keep watching and see how it goes over the coming weeks.
My Portfolio in General
Most of my traders are trading Forex, hopefully capitalising on the moves in the markets which are constantly happening and potentially staying clear of any major downturns in equities should they occur.
Being a popular Investor
Now that I'm a Popular Investor on Etoro, I'm starting to think about how to climb the rungs of the PI star system. That would mean having €20,000 in my trading account and at that point, I'd definitely want to be copying traders who have a strong low-risk focus. That concern is really informing all of my decisions about who to copy now. It's one thing to risk €500 (although I don't really even want to risk that too much) but risking €20,000 is a whole other level of riskiness...
So I'm really trying to build a profitable low-low-risk portfolio. We'll see how it goes.
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