I have assigned my funds to an expert trader who claimed to have more than 10 years of trading experience.
However the recent detailed report results made me very worried, can any kind soul please advice me based on the results? (2 weeks ago and today)
This is what I see based on the figures you have quoted above. For closed trades, the commission paid is higher than the profit. So at one glance it appears that all the profit made flows into the commission column.I have also labelled 1)-5) on my answers to your queries.1) Yes, you are right about the sentiments of gold. Technically speaking gold has started to turn bullish since beginning of the year and it is in the news as well.If you have short positions in a bullish market, you will lose money - regardless if it is just a short lived one or for long term.2) Safe trading involves risk management, money management, exposure, technical analysis skills etc.For open trades on 21/1/16, it is considered a net short 1 open position. If you have short 44 positions, in order to reduce the exposure, you should just close 43 short positions, and not open another 43 long positions.By not closing the existing 43 short positions, you are only paying extra swap fees and commissions for no reason, without any improvement to the trading performance. Eventually you will still have to pay extra commissions to close all these extra positions you have opened. 2b) Max drawdown is an indicator of the risk of a portfolio chosen based on a certain strategy. It measures the largest single drop from peak to bottom in the value of a portfolio (before a new peak is achieved). This metric is good for identifying funds that preserve wealth by minimizing drawdowns throughout up/down cycles, and gives an analyst a good indication of the possible losses that this fund can experience at any given point in time. Quote from http://www.styleadvisor.com/resources/statfacts/maximum-drawdown"One would hope that the maximum drawdown would be as small as possible. If an investment never lost a penny, the maximum drawdown would be zero. The worst possible maximum drawdown would be 100%, meaning the investment is completely worthless. Most maximum drawdowns will fall somewhere between these two extremes." Based on your figures, the trading strategy used is extrememly risky. The figures also reveals that the opened positions would have already wipe out everything and beyond at 100%. So it appears that there must be a top up to your account before to salvage the situation from a complete loss, thus it reflects a scenario of Max DD beyond 100%?3) Hedging is usually used if you are unable to liquidate your existing positions (as a shareholder you can't liquidate your shares, as a fund manager you can't have 0% investments and 100% cash), hence you use another higher leverage vehicle to hedge or preserve your capital value. It would be foolish to incur more new opposite positions in order to neutralise your trades, when there is no advantage by doing so.If you feel that your right hand is overloaded and you are tilting to one side, will you let go some weight on the right, or continue to carry more on the left so as to achieve balance?4) "Paper loss is not a loss" explanation only makes sense on less volatile vehicles such as stocks (still volatile, just lesser than futures) as there is value creation (business growth etc). It cannot go to zero or negative at 5pm today, and then back up to 200% in the next few days.This explanation is not applicable to risky and volatile instruments such as futures & commodities, where it can wipe you out in a period of 2 hours, and then swing back up to 200% profit after you are entire wiped out. The paper loss is "the damage already done, reflected under a different section". It is "not considered a loss" ONLY IF you have made an equivalent floating profit, so that your floating P/L becomes 0 again. Otherwise the figure is showing the money that is already not in your account anymore.If it is "normal" like what he said and the money is still yours, try closing all the positions and reopen all the exact same positions again, and the truth will be obvious to all. Otherwise it is a clear cut manipulation of the situation as you have a contract agreement with him.Based on the 2nd report, within 2 weeks the bleeding doubled. If he were to think the opposite way within this 2 weeks, your bleeding would be healed by now. It also means he could have continue doing the same thing and you will be wiped out in no time.5) If you found more and more worms growing in your apple basket, what will you do?Any sound trader will reduce positions to preserve unneccessary commission and swap charges in your current situation. If anyone wants to short the market, they will logically reduce the opened long positions, instead of creating new short positions that does more damage to your portfolio.An upright money manager will make his profit from the market (out of the pie), but an unscrupulous one will just focus within the pie that he is sharing with.
I hope this is helpful enough for you to get out of your situation soon!All the bestRobert
Your true value during performance evaluation is the "Equity".
This is how periodic performance is measured without interfering fund managers activities.
It is measured using "Equity/Balance x100" over a specific period of time.
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