Note: SatelysFX live performance were made on the currency market on behalf of our investors. Their trading accounts were opened with our own brokers (JFD Bank until the 23rd of September and FXOpen from the 1st of October). Our results show the increase of their equity, open position and floating PnL included. They are net of brokerage and swap fee but the profit reinvestment (compound interest), our maintenance and performance fees are not included.
Quarter 1: A great start +21.1%
With the rise of a pandemic and the panic on stock exchanges, the beginning of 2020 illustrated two sides of the business. First, the absolute necessity to diversify a portfolio among several asset classes in order to better manage the stock indices’ crashes. Secondly, the correlation between volatility and the performance of our strategies.
Quarter 2: Switch to defense +2.3%
Despite an extraordinary start and due to the unpredictable context related to lockdown and the shutdown of developed economies, our risk management module moved several currency pairs in quarantine and switched our algorithms to a more defensive approach.
Quarter 3: Summer manipulations +1.3%
The beginning of Summer came with the end of most lockdowns, further stopping the fly-to-quality phenomenon. The greenback has been a natural victim and the EUR/USD pair reached a new record of long positions in August since its inception 20 years ago (source: CFTC). This indicates that the European currency will struggle to durably sit on 1.20 USD without a prior sell-off (the new potential buyers mechanically missing).
Such an atypical situation encouraged our algorithms, unbridled by the first semester accumulated profit, to progressively return to a more aggressive setting. Despite an early entry and multiple seasonal price manipulations, which caused a temporary equity drawdown, that was rewarded in September.
Simultaneously, the constant panic of our broker in the health crisis management and the multiple changes in our trading conditions (spreads, post-trade transparency, required margin, etc) have affected our results. This situation forced us to react by moving to a new partnership from the 23rd of September.
Quarter 4: A beneficial change of broker +6.0%
While we were initially cautious after resuming trading at the beginning of October, the sudden return of health restrictions supported the volatility again and allowed us to finish the year like it had started, ultimately reaching a yearly performance in line with our target.
Conclusion : A solid year +30.6%
Despite a brief drawdown larger than usual during Summer, the study of market sentiment and other traders behavior allowed us to make a much more profitable year with a return that exceeds those reached by most alternative investments, including hedge funds.
In short term trading, especially with a good transaction frequency, the analysis of behaviors beats all other kinds of strategies. Indeed, liquidity distribution and pressure balance always determine the next price move.
Such an approach succeeds where fundamental or technical analysis, acting by themselves, fail. The former because it can only be pertinent on a longer run. The latter because it is nothing more than a mathematical view of the past, useful in best cases to improve your timing when it matches order flows.
Risk Warning : Margin trading is highly speculative and may not be suitable for all investors. Please be sure you understand the risks and only invest what you can afford to lose. Request an additional opinion if necessary. Past performance is not necessarily indicative of future results.