A Turnaround in Fortunes After a Rough Year

Just when it seemed like the momentum had been lost from the rally in global stock markets, prices have pushed higher over the past week. This resurgence has been especially pronounced on Wall Street, with both the Dow Jones and the S&P 500 testing six-month highs.

Elsewhere, the German DAX has rallied well over 3% since the beginning of last week, while the UK’s FTSE 100 is back above 7300 and close to 6-month highs, despite weathering a big storm of Brexit uncertainty.

The top trader we are considering today is heavily exposed to the German stock market. Their account operates under the name Hambu and they struggled in 2018, particularly in the second half of the year, but appear to have got things back on track in 2019. This is how their account looks:

Positives include the low risk and volatility scores and that they are showing a net profit with a real-money track record that stretches all the way back to April 2017. The size of the maximum drawdown in comparison to the profit is a negative, though.

To try and put this into more perspective, let’s now move on to see how things stack up month by month.

We can see that they had a nicely profitably run through 2017 and into the first half of 2018, but they ran into choppy ground in the second half of that year, with a succession of small monthly losses, before the wheels just about fell off in December. At that stage, the account was in a hole overall.

They have taken good advantage of the subsequent recovery in global stock markets though, and managed to climb out of the hole with a strong first quarter to 2019, up more than 9% for the year so far.

We said before that they are heavily exposed to the German stock market; let’s see just how much:

We can see there’s a tiny allocation of exposure to gold and US blue chips, but for the most part, they trade in the German DAX. They do not exclusively go long, but there has been a strong tendency to be positioned that way, so there is a big reliance on that index continuing to perform well. The lack of diversification on display means that there is very little to cushion the blow if things don’t go their way with the DAX.

Overall, the track record is a bit of a mixed bag. This does allow some insight into how things look for this trader when things go wrong, though. Importantly, they have survived those travails to see things turn around in their favour.

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