The rough ride for global stocks continued last week, with the German DAX dropping to its lowest level since late 2016, alongside steep falls on Wall Street, but this week has got off to a promising start.
Stocks recovered at least part of last week’s losses with some healthy gains on Monday, the Dow Jones climbing 1.5% and the NASDAQ 100 more than 2%, as battered tech stocks finally bounced and record online Black Friday sales figures helped to lift retailers.
One of the factors that has been spooking investors of late has been the prospect of higher interest rates. The Fed is widely expected to hike again at next month’s FOMC meeting, but traders will be paying close attention this week to comments made by Fed Chair Jerome Powell, who is due to speak at a function in New York on Wednesday, while minutes from the last FOMC meeting will be available a day later.
The Top Trader we are going to look at today is fairly new, but has got into a nice run the last few months. Their account is called retlaw4713 and these are some of their headline trading statistics:
As you can see, they have only been trading with real money since July of this year, but they have already managed to rack up more than 6% in gains since then, which is quite nice going. Obviously, we have to note that the maximum drawdown as a percentage just slightly edges that percentage gain, but their risk score is reasonably low at 3 and the volatility gauge is a low 1.38%.
Although the track record is quite brief, it’s nevertheless worth taking a look at the monthly profit breakdown:
After some small bumps early on — July and August yielded some small losses, as we can see above — they got into the swing of things quite nicely over the remaining months, with solid successive monthly gains up to the present.
Now, we always like to stress the importance of a long track record and clearly we do not have that here. We can’t draw as much confidence from this short profitable run, as we could from a trader that has demonstrated the ability to make money over years and years.
But we can acknowledge that they are currently in a promising run of form, and what they have been doing for the last few months has worked well with market conditions over that period.
Let’s now talk about what markets they’ve been using to turn these profits.
I think that’s a reasonably diverse picture. Yes, the DAX holds sway to a large degree, but there is a substantial amount of exposure spread elsewhere, over the likes of gold and the volatility index and some FX positions. Overall, it makes for fairly well-balanced mix.
So, all in all, this account is lacking in the track record department, but they do have some pleasingly low risk metrics alongside a decent amount of profit. It remains to be seen whether they will be able to stretch out their winning ways over the long term, but it’s at least an account worth monitoring.