Marco Nigro is a business executive who chose Automated Trading as a tool to actively manage his assets as an alternative to simply keep them in the bank.
In the first 7 months of activity he managed to generate profits for € 16,800, but he did not stop here.
After the recording of this interview he continued to work hard managing to break through the wall of € 30,000 !!
Marco is a student of mine who started his career with “Trading System Supremacy”, thanks to which he managed to create his first strategies. He then started to trade them live. As the number of systems grew, he wanted to better understand the methods of evaluation through “Trading System Evaluation” and the correct approach to position sizing through “Mastering Position Sizing”. To complete his training and make the most out of the skills he learnt, he then wanted to know more about the principles behind the correct portfolio management, studying “Portfolio Secrets”.
I suggest you take a look at this interview, where Marco gives very interesting advice especially to those who are still trying to find their own way in Trading.
Who are you, what do you do and how long have you been trading?
Ok, I’m Marco Nigro, I’m a business executive and I am a consultant in the Information Technology field, I work for a multinational company.
I’ve been doing this job for 20 years, I like it, but I’ve always been fascinated by the world of finance – by the way, the industry I work in is banking-.
Why did you choose to do automatic trading?
The thing that fascinated me the most was the lack of need to be in front of a monitor in order to do intraday trading. In the sense that I’ve always seen traders as talented people, who had a particular talent, and with the ability to understand, broadly, if that security went up, went down… but who were also a bit isolated, you know? Sitting there, looking at the graph, put it in order and then move the stop… I don’t know; doing what they were doing for me was a bit like for “experts”, I never found it interesting.
Automatic trading, on the other hand, attracted me exactly because, although it is necessary to watch over it – it’s not like you can just put something together that trades in your account and then leave for a year and then come back and see what happened… you have to be there and watch what happens, but you can also delegate much of your daily work to your computer. Overall, now while we’re speaking, there are some of my systems that are there: if a series of conditions trigger an order, a defense and whatnot is triggered.
On which markets do you operate mainly and why?
Currently, I operate on crude oil, the United States oil and metals (gold, copper) and natural gas, and then I also have a few systems on equity stock indexes, such as DAX and miniSP.
I also have something on forex which, thanks to Andrea’s methods, I’ve started to analyze and which is currently giving me great satisfactions. So this is how my portfolio is structured: 30% on forex and 70% on futures, between commodities and stock indexes.
How are you structured? Which platform, broker and data feed do you use?
Ok, so I started right away with IQFeed as data feed, which seemed to me the most reliable one, albeit a bit more expensive than the others and then as a technological platform, I activated Multicharts, which were, let’s say, the key elements of Andrea’s students. Since I started on that track, maybe one day I’ll change because I’ll analyze other possibilities, but for now I’m fine with these. In the beginning, I used an Italian broker – I don’t want to say his name because later I left him – and then I went to Interactive Brokers.
In the beginning, I used to prefer the Italian broker for the advantages on the matter of the capital gain but I actually noticed that, whether due to a question of time windows that were not always active, whether because I noticed that the slippages were higher than on those… – at the beginning I compared it with the interactive brokers: same system, miniDAX, on the Italian broker and on Interactive I saw that the Italian broker took much more important slippages and then I preferred to abandon the Italian broker and go with Interactive.
Now I have a fairly standard infrastructure for the group of the Unger Academy: Interactive Brokers, Multicharts, iQFeed.
Which Unger Academy courses have you attended?
I attended them all! In fact, I did the first one, Trading System Supremacy, about a year ago, less than a year, and I studied it in the smallest details, I began to work after it and then, when I was live with a few systems, I attended the others too. So I attended Trading System Evaluation, the Position Sizing one and then the last one about the portfolio.
What was your main problem before attending these courses?
I didn’t really have any particular problems. It was just the desire to make some savings in a bit more profitable manner compared to just holding them in the bank, and even taking some risks, because when you work with this type of instruments, the risks are not trivial.
What did attending the Unger Academy courses led you to?
They led me, most of all, to better understand some of the dynamics of this world, the world of the Futures. In the sense that, as instruments, I knew their characteristics but I had never traded them and also the possibility of making them my own, in the sense that the most fruitful thing, in my opinion, of this type of training that Andrea Unger provides, this Academy, is to teach you to research the markets and find an edge, an advantage that statistically can give you the possibility to profit in speculation, because then we, the little traders, are the speculators of these underlyings. But it also gives you, how do you say, sometimes I agree with a comment that another student made, it gives you the possibility to shoot at goal without the goalkeeper because it gives you semi-finished products, so things that you can work on later even more, already nice and performing.
I have a system that I use on DAX, in fact, it is a variation of what Andrea explained in a module during the course, making us reason on some of the logics of the time windows, breakout of maximums or minimums and then, I repeat, I put in some of my own. But perhaps, what I am using is 20-30% away from the basic model so the difference that I’ve seen, I also attended the course of another school, precisely in order to have an even broader vision and I saw the difference between those that tell you: “these are the setups of the system” and just leave you there. Maybe it’s a system that could also work but they don’t help you understand how it was built in order to allow you to build others on your own and in order to succeed, in the long term, and let you be in this world because then the markets change, they evolve… you have to keep your strategies under control. There are no systems that last forever and this is something all systematic traders tell you. So the advantage of the Unger Academy is that it tries to give you the possibility to be autonomous in system building.
Why did you choose an Andrea Unger course and not another teacher’s?
I have to admit that the thing that obviously struck me is Andrea’s name and his four world championships won, the Robbins Trading Championship. The top!
What was the main concern that kept you from buying these courses and that then turned out to be unfounded?
First of all, it was the course of spending money for nothing, in short. My concern was to make the transfer for the purchase and then find myself with something that wouldn’t give me anything in return, like maybe just a few useless theories. But then, fortunately, that didn’t happen. I am also doing these interviews because I’ve been able to touch the threshold of the first ten thousand dollars, euro actually. By the way, I managed to touch the threshold of ten thousand euro because the exchange rate right now is a bit far from being equal, which makes the difference.
In fact, I must say that it was also good for me because I had a boost of six thousand euro more after the activation of the Academy communication. So I have fully compensated the cost of the training.
What results did you obtain after attending the courses? What was your initial capital and the drawdown you had?
The results I had now, as I just said, are about, more or less, exactly equal to 16800 euro more than when I started. I started with a capital of about forty thousand euro and so I used a technique suggested by Andrea Unger, to size the number of contracts on the stop loss of each strategy and so I dedicated only strategies that allowed me to stop more or less around 1000 euro because I wanted to dedicate 2.5% of my reference capital to my strategies. In reality, however, I did something a bit stranger: I put only twenty thousand euro on the broker, holding a bit in the back the other twenty thousand in case I had a higher drawdown. This also led me to set up systems that did not take too much of my account. Currently, the twenty thousand euro that were supposed to be held back have stayed there, held back, I am not using them, while those put on the interactive have become nearly 37.
How long did it take you to obtain these results?
Let’s say that I consider as my actual start date, March first. It’s been seven months.
Can you talk more in detail about the position sizing algorithm you adopted?
The money management I’m using is the Fixed Fractional so, I take my capital, I calculate its risk percentage (which I’ve placed at around 2.5%) and then I size the entry in position on the basis of the fact that my maximum loss due to the stop loss I entered into the system will be about one thousand euros.
So far, I haven’t activated an upward escalation mechanism, in the sense that as my capital was growing and the strategy was bringing in money, I haven’t increased the number of positions except on some systems in which I had started a bit low, those on forex because on forex I had read that it was better to be prudent under some aspects, because as these were unregulated markets, the strategies didn’t always do what you expected them to do… and then forex gives you the possibility to start low, right? So, let’s say, I have a system on the euro-dollar where initially I had two mini lots, so 20000 euro equivalent, which then I brought to forty thousand (40000), which among other things is one of the systems giving me more satisfactions. With just that, I took home about four thousand euro, during these six months…. even less… since at the beginning I was a bit of a beginner – not that I am not one now, but perhaps I learnt something on my own-… I started to put together a strategy, then two, then three… I didn’t start already with one portfolio. Now that I have about twenty running but I haven’t started right away with 20, I put them one at a time. The highest drawdown that I had to suffer was of about 6000 and change, 6500 euro, which was pretty close at the beginning. In the sense that, at the beginning I started with a +1000-1500, then I immediately got the drawdown, I admit that part of this was due to technical errors, due to the difference between when you do the simulation and when you go live, banally, I mean, the matter of the continuous, the future continuous, that points to a well-defined instrument; the difference of half a point between DAX and miniDAX (it doesn’t make sense to go into details now) but these were contests in which the stop loss was not triggered properly, so I lost more than I should have lost or the order wouldn’t start when it had to start and it was, by chance, a positive trade that I had lost. Let’s say that those who face this world must understand that supportive technology needs precisely, slowly, to make sure that you acquire skills that you did not initially have because there are so many details that you can not deal with just by studying.
The school’s forum certainly helps, and sometimes gives you some indications and some solutions.
In fact, a few of the solutions I’ve also found thanks to what I read on the forum.
What do you think had the biggest impact on achieving these results?
I think it was diversification because this type of being on the market through algorithms that are actually silly, because they are quite simple, trivial algorithms…. not banal, but not so complicated. They are, sometimes, even five lines of a system that tell the system “do this if that happens”. Being diversified on several markets, even on several instruments, or several techniques because I have a system on DAX that goes in countertrend and another that goes in trend and so then they somehow help each other because it happens so that one goes well the other goes badly and vice-versa, luckily, the sum of the systems gives a positive delta and so the equity grows.
However, maybe if I had not had that countertrend, which is the best performing at this market stage, my equity would have been affected.
Of course, if I did not have that other one in trend, I would now have more money on my account.
But at the beginning you can’t know which systems will go well and which ones will go badly.
So, surely, diversification is the most important thing.
In fact, returning to a question you asked earlier, “Which position sizing do you use?” right now I like better the philosophy, as the account grows, rather than increase the number of contracts on a strategy that is going well, I prefer to add another strategy that then helps the entire portfolio.
Yes, well, it’s clear that once you reach 80-100 strategies, perhaps at that point you have a broad enough diversification to say “oh well, at this point, if things go well, I’ll increase the number of contracts”, but I’m still at 20 and for now I am thinking more of finding other techniques, other strategies and other systems to add.
Just recently, you see, I put in my portfolio a strategy I found on the forum, the one on the ADX of crude oil, and I was lucky: it did a $ 1000 trade last week.
What did you like about the courses and why?
What I liked most was the concreteness in explaining certain trading techniques. Here: Andrea takes a real instrument, he shows you how to arrive at that system, which he has obviously studied in the past because then to make a system, sometimes, it requires months of work, right? He shows it to you in half an hour, he shows you the various steps. But he shows it in a practical, operational manner, using perhaps a platform… this is maybe some people’s limit. Not for me, because if you want to use a different platform, then it’s more difficult for you to follow him.
In fact, this is also why I preferred then to use the platforms he uses because that was much simpler, right? Now maybe I can feel ready to change, perhaps in an year… but at the beginning it was complicated, so I preferred to repeat the steps and when I saw that the steps he was showing were simple to do and the results themselves were the same then I appreciated even more this way to teach.
So, not just theory, not just “this is the system I studied in laboratory, here is what it does!”, but we start from zero, we start from a minimum, from an embryo, and we see how to develop a system that must do certain things, how to improve it, which can be the threats behind it, be careful for this, this and that type, etc., etc. So I really found this type of approach much more effective. I repeat, the other course that I attended was not this direct. It started off with a system that was already complete, you just took it as it was… but Andrea shows you how to get there. There, I think, is the real difference.
Who would you recommend this course to?
I would recommend it to anyone who wants to start off with the mathematical-statistical analysis of financial instruments and who wants to put some capital at risk to make it more profitable. I understand, I admit that I have a high schooling: I have a degree in engineering, so for me some things were much simpler (I’m always a bit, let’s say, armed with computers), so certainly some of the obstacles were easier for me to overcome.
But I admit that here we’re not talking of NASA’s missile sciences, so these are things that are easy to understand.
So, whoever has time to dedicate during the weekend because they have no other good-natured hobbies and want to earn from a sort of a second activity, something more than whatever they bring home with their job, I advise them to start on this type of path. Surely, the warnings I give also to all of my friends who ask, is to also be a bit of risk preference and the ability to support the losses, which is the most complicated thing in this world: to face the negative periods.
What advice would you give to those who are still looking for their own way in trading?
Obviously, I’d recommend the basic course of Andrea Unger, the Trading Systems Supremacy, I recommend it to anyone who wants to face trading in a bit less conventional way compared to “I’ll buy this and that share on the Italian market” or when I see the mix of two moving averages, I buy and I sell… things that you can sometimes read in books, but are then books that sometimes give you techniques that don’t have even one factual counter-proof of the fact that they work. The main thing, the advice that I give is: if you trust statistics and you want to try out the ideas you have, equipped with the platform that you allows you to do so, you take the data, which is also sometimes free (you can find them) and you test the things that you want to do, in fact in the past they’ve worked, you do not have the guarantee though that they’ll work in the future but you have a good starting point. So, let’s say, that making the first course of Andrea you have an exceptional accelerator because perhaps in a month you’ll manage to learn to use also these platforms. These aren’t lessons dedicated to the use of the platform but then in the end, seeing the things that you do, 90% of the features you learn and then you can test your ideas and, moreover, take home some interesting ideas that I repeat, are not courses that tell you only how to do but they also give you good starting points. So, this is my advice.
Another advice: I’ve read a lot, I devoured trader books this summer, even as retired, that tell you how, sometimes, you need a bit of Zen, to fight your own ego, an entire series of mechanisms that would then help you in the time of need, right? Because many people tell you the tale of how the systematic trader does not have the psychological rebound. But they do, because the negative moments are always difficult to deal with, right? In other jobs too. Here, you have them a bit more often, there are more unknowns, so I advise you also to read a bit. I’ve also read the Larry Williams book, I mean, I just threw myself a bit onto the literature of the sector.