Early Days, But Big Profits

Stocks have been generally climbing in recent trading days, though gains on Wall Street have been constrained by some key stocks coming under pressure. The Dow Jones kicked off the new trading week by rising for a fourth consecutive session, which came in spite of Boeing dropping 1.8%.

Boeing is the largest-weighted stock in the index, but has shed more than 15% of its value since the end of February, on account of the troubles surrounding its under-investigation 737 Max 8 model of jets.

Other leading stock indices from around the globe have also been on the rise along with the Dow. The FTSE hit a five-month high on Monday, breaking above the 7300 mark intraday on Monday and closing only a few points below that, while the DAX has performed in a similar manner, also hitting a five-month high in Monday trading.

The top trader we are looking at today is called IndiBot. They only have a short track record on display, but it is an impressive one nonetheless. This is how the account looks at the summary level:

As is often the case, it’s the overall performance figure that first catches the eye. Profit in excess of 37% is great going and even more so when you consider that this account has only been active for three and a half months.

The account has a reasonably chunky maximum drawdown of just under 24%. That still compares favourably with the overall profit, but there are other metrics here that should strike an even bigger note of caution when considering this account. First is the risk score of 6, which means this account is not in the low-risk bracket and is instead firmly in the medium-risk category. The volatility rating north of 8% is also a clue as to how this trader has been operating — their attitude to risk is evidently on the cavalier side.

Let’s now explore how the profit and loss situation looks when we break things down into monthly chunks:

With the brevity of the track record, there isn’t as much to go on as we would normally like, but what there is to see is all positive. There are four months on display and they are all winning months.

Particularly impressive is how they have leapt into form after a reasonably quiet first couple of months. Back-to-back months with double-digit percentage gains is great going.

Let’s wrap things up by considering their asset allocation.

So along with those fairly steep risk metrics we mentioned before, we also have to take stock of how undiversified their use of instruments has been thus far. Their exposure is wholly tied to the German stock market.

In conclusion, this is an account that has achieved impressive gains in a short span of time, but there are evidently a few factors here that suggest some caution would be prudent, especially if you have a more constrained attitude to risk.

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