The financial markets are in turmoil. The price movements resemble the volatility from the Great Recession of 2008-09. Stock markets were plummeting, USD/AUD/NZD/oil/bitcoin have fallen, and EUR/CHF/JPY/gold have been strengthening.
The volatility is likely to remain high due to fears over the impact of the Coronavirus on the global economy. There are also uncertainties about how fast and far the virus can spread.
Despite the hefty ups and downs, the Ultima EA and the CAMMACD trading systems via ecsLIVE have done remarkably well. Let’s review how these two trading systems performed during these financial storms.
Automated trading systems are particularly vulnerable to hyper volatility. Wild price movements can derail many automated systems and do serious damage to their performance – or worse. So far, Ultima EA has managed to navigate through the storm without major problems.
The creator, Mislav Nikolic, did an impressive job of setting up sturdy rules where the EA avoided trading under these circumstances.
The Ultima reaction to the price volatility has been two fold:
Considering the massive losses seen in the markets, not losing any money (so far) is not bad under these circumstances. Remember: sometimes not having a trade equals being in profits.
What’s next? Nobody knows for sure at the moment. More data is needed in March to make a better assessment about the expected impact. There is a 50-50 chance that things will settle down a few weeks from now and only a mild recession will emerge on a global level. Or events will turn sour and a larger global recession (and the volatility that goes along with it) could emerge as a real risk.
We cannot predict the future and we are never sure how an automated system will respond to these types of storms that hit people, the economy and the financial system. But so far, so good.
What to do? For Ultima traders, the choice is always yours, the trader. But we can share a few ideas that you could consider, among other choices of course.
The Ultima EA has had an impressive winning streak in 2020. The accounts were up 14-16% in January and an impressive +204-217% in February. But these types of gains are not sustainable month after month.
Please keep in mind that all systems, also Ultima EA, have ups and down. Ultima’s performance from October 2019 to December 2019 was certainly more modest with my own account:
The drawdown when trading with 3% risk per setup was of course lower. In fact, the system even made a gain, although relatively small:
The point is that traders need to be aware and ready for draw-downs. They should also realize that there could be months where the system performance goes sideways or slides into negative territory.
After such an outstanding performance in February 2020, we need to be prepared that the performance can be weaker in the upcoming months. Being aware of this reality could help traders handle the potential draw-down or slow down from a trading psychology point of view.
Manual trading allows way more discretion to the trader. This is both a benefit and a danger at the same time.
Extreme price movements can trigger extreme reactions, both in the market psychology and trader’s psychology. It takes a calm and cool mindset to stay focused.
Nenad Kerkez, the creator of the ecs.CAMMACD system and head at ecsLIVE, managed just that. He showed traders the way via the ecsLIVE signals. Reducing the risk when needed. Taking trades at the right moments. Avoiding setups when needed.
His account has again hit a record high, despite the financial turmoil.
Mislav Nikolic, creator of Ultima EA
Nenad Kerkez, creator of ecsCAMMACD
Chris Svorcik, creator of ecsSWAT