As we offer different traders to choose from, we have prepared portfolio building tool where you can test different combinations of strategies. When you select strategy, you can also adjust several parameters such as starting balance and your desired risk level.
We are big fans of diversificaction as risk is then divided between different strategies and investment is more balanced. If you invest into 5 traders and use same risk levels based on past drawdown and split risk between these 5 traders, it is 5 times less likely they will all have loss at the same time. So if we set our maximum drawdown to 25%, then all 5 traders would need to loose 1/4th of capital on the account at the same time so you reach maximum drawdown level. As you trade different strategy that are trading during different times of a day or trade different instruments, your portfolio becomes more balanced and usually you decrease the risk.
Once you build the portfolio it will provide you with more info about maximum historical drawdown reached by all combined strategies. By adjusting risk you can also set how much of capital you want to allocate into each strategy. By selecting lower risk can also minimize drawdown per strategy.
Once you decide what strategies would you like to trade, you simply save your portfolio and open the account with us and we will run your selected portfolio.
To build portfolio please follow these simple steps
1. To create portfolio, first select traders you want to be a part of the portfolio
2. Then please adjust balances for each trader – the amount you wish to invest per each trader
3. By adjusting the coefficient you are able to adjust risk of each trader. Let‘s say you don’t want to risk more than 10% of your initial investment calculated from a maximum historical drawdown achieved by each trader. By modifying the coefficient you can decrease risk so it better suits your risk profile. By changing this value from 1 to 0.5, drawdown will decrease by half, but so will the profits. Trader would be trading this much less or more of his original position. When you change this value, a page will update and automatically recalculate drawdown and p/I values.
If trader’s maximum drawdown was -57.82% and profit 500.23%, we would be looking for a value that would bring -57.82% drawdown closer to our targeted 10%. 57.82 / 10 is 5.782. Coefficient 1 divided by 5.782 is 0.17. After changing the coefficient to 0.17 (in reality this would basically be trading just around 1/5th of the original amount), the historical drawdown would be -9.83%, which is closer to our -10%. The profits are also lowered to 39.81
We repeat this process until we find correct coefficients for each trader to fit our risk appetite.
4. Name your portfolio and press Add custom portfolio
5. Your portfolio is fully ready and optimised based on -10% historical drawdown. Your saved portfolios can be further found in My portfolios menu.