Interview with Sergey Nikitin (ATC 2011)

Interview on Automated Trading Championship 2011 from 19.10.2011.

In the second week of the competition, the Expert Advisor of Sergey Nikitin (VNIK) trading on two currency pairs EURUSD and EURJPY got featured on the very top drawing away from the rest. Multicurrency Expert Advisors always attract attention in the Championship, especially those that show good results. We talked with Sergey about the role of luck in a trader's life and his way of trading.

How long have you been acquainted with trading, Sergey?

I became acquainted with trading in 1999, when I was a student. After graduation in 2003 I took it more seriously.

And was your education? Is it somehow connected with programming or hard sciences?

I graduated from the Physical-Mathematical Faculty of the St. Petersburg State Technical University, specializing in "Applied Mathematics and Computer Science".

In 1999, there were much less opportunities for trading in financial markets. So how did you get to know trading at that time?

My father (Vyacheslav) introduced trading to me. In 1999 he already was trading forex on a real account. Since then we have been working closely with him in this direction.

So your father is also a trader? Can we say that he was your teacher? Did your trading methods and attitudes change since then? Was it a mutual experience?

Of course, at that time there was little information about trading on the web. But then there appeared more and more books and articles translated from English and other languages, a huge number of software tools for technical analysis and especially for automation of the trading process. So, of course, a lot has changed in our relationship to the trading process. We had to learn everything from scratch. As for the teacher, perhaps this is true - he is trying to share not only knowledge but also his experience, which is really priceless.

How old were you when your father introduced trading to you? Didn't you feel that it was something new, where you can easily make money? By the way, were you a good student and which subjects did you like most?

In 1999 I was 19, a third-year student at the university. Of course at that age all this didn't seem serious to me. That's why I say that I started trading more seriously only after graduation. I graduated from school with honors, but the university was harder to me, although I graduated with fairly good results. Since childhood I was good in "technical" subjects, so I chose this profession.

Is your current profession in any way connected with financial speculation? What's our job?

I'm an IT specialist in a large bank. But my job is not connected with finances. Rather, I am using my skills of a programmer and system administrator.

So, you know the banking system from the inside. Does the bank you work in provided financial market trading services?

Yes, bank customers are offered account management in financial markets, but I, unfortunately, work in other areas of the bank.

What markets are offered to the bank customers? And what financial instruments do you and your father trade - forex, stocks, futures, etc.?

As for the bank, forex trading services are not available. While we trade only forex. Currently we do not consider other markets, since we are quite happy with Forex, which is the most liquid.

Banks care much about security. Do you have an opportunity to trade or monitor the markets in your workplace?

In the bank, access to the external network is completely blocked. Therefore, at this point, I seriously develop a system for automating the trading process, so that the whole trading process could work without my intervention.

Maybe it's for the best when you cannot trade yourself manually? What is your experience of manual trading? Does psychology hinder much the trading process, in your opinion?

Of course, the influence of psychology is strong in the process of manual trading. So the best solution, in my opinion, is to use automated trading systems.

Do you follow the Championship during working hours? And what did you feel when you learned that your Expert Advisor appeared at the top of the ATC?

I learn about the situation in the Championship only in the evening, when I return home. I think any participant of the Championship hopes to get into the top three, and I am no exception. And of course, I was very pleased when I saw my EA in the first place.

Last year, The Expert Advisor of Boris Odintsov became a leader in the second week of the contest, when after the Friday closure its balance was almost $80,000. Eventually, he won the ATC 2010. Did you know about this fact and what can you say about it?

I know about this, because I also participated in the previous Championship. What can I say about this fact? I don't know. I can tell more about this only after December 23.

You are a regular participant of the Championship except for one year. Why did you miss ATC 2007? You participated in 2008, but your EA didn't trade. Was there an error in your program?

There was an interesting situation in 2007. My EA was not allowed to participate in the Championship. As far as I understand, the reason was that the final compilation was done on my work PC, while I sent it to the competition from home. In 2008 I didn't understand properly some of the new rules of the Championship, and eventually my system in the EA simply didn't receive all the necessary input data for trading and, accordingly, didn't open a single position. Well, it happens.

You have the programming skills and studied mathematics. Does it give any advantage or is it necessary for a trader? What do you think?

At least, I cannot imagine myself in trading without these skills. I believe that mathematics and programming are necessary components of successful trading.

In 2006, your Expert Advisor was not very successful. Were there problems with EA settings or was it just a matter of luck? In general, do you send different EAs for each Championship? Do you take into account your contesting experience in your EAs?

Of course, I learn from mistakes. After each ATC, I held detailed analysis of the trading process and for the next Championship I prepare a revised EA taking into account my previous mistakes. And I've already started to prepare a new Expert Advisor for the next competition. Honestly, I don't remember what happened in 2006.

What do you need to leave your current job and to trade forex professionally? How does the trader's Grail look like in your opinion? In general, do you have any desire or intention to be completely financially independent and earn on rate fluctuations, as they say in advertising?

It's a difficult question. Of course, I've thought about this many times. But I can't make a decision so far. It's a very risky activity. Maybe if I win the Championship, this will help to solve the issue positively. At least, I would like to believe it. As for the Grail, I've written about this in the forum, here is the link - https://www.mql5.com/ru/forum/4234/86142 # comment_86142. By the way, my current EA is built based on this indicator.

In that forum post you're talking about trading on a monthly timeframe. It's so boring and does not correspond to those films that feature the exciting life of traders!

Yes, but the whole point is to transfer the system into smaller charts. And perhaps I did it in my Expert Advisor. Do you get bored looking at its work?

No, and I think that your Expert Advisor will enjoy attention at least for the nearest future. Looking at its trading, I can say that "The Appearance of a successful multicurrency Expert Advisor in the Championship has come true!" We believe this time the portion of multicurrency Expert Advisors is much higher this year. Do you also think so? Can you explain this phenomenon?

I think the number of multicurrency EAs will keep growing. And that's a right development, because only in this case you can get the maximum profit and have good chances to win the prize. By the way, last year I also had a multicurrency EA.

Yes, last year your EA came to the finish with a profit, though it was not large. It traded pound pairs - GBPUSD and GBPJPY. This year your EA is trading euro pairs - EURUSD and EURJPY. Is it the same Expert Advisor just with other pairs or something new?

Yes, this is the same EA, but modified in the light of last year's Championship. I've selected pairs for smoother operation and made adjustments for changes in the rhythm of the market due to increased volatility. 

The difference between the balance charts of these two EAs is great. What have you done to provide such a smooth performance? Can you tell us more about your EA?

I think last year I chose highly volatile pairs, plus the market was unpredictable - this resulted in the sharp balance chart. This year, my EA is based on a classic trend following strategy, and the following principles are maintained: add to profitable positions, lock losing positions. In addition, in my EA I used our own know-how - trend-watching indicators.

As seen from the logs, after being opened a position grows and currently the total volume of open positions is nearly 24 lots (as of 15/10/2011.) On what basis does the initial opening and subsequent growth happen? 

There is an input parameter - some risk level taking into account a stop loss. When opening a position, its volume is set based on this risk level. Then the EA analyzes the equity level and, in case of a positive forecast, the position volume is increased.

Now, even with this huge position on the account, the equity is $28,000. This is enough to open a position on other symbols. Will your EA trade any other pairs?

This EA won't trade anything else, since it's set up for these two pairs. With the initial deposit of $10,000, use of three or more symbols is virtually impossible. At least with our strategy.

But providing this may happen that there is enough money on an account, like it's now, it would be logical, wouldn't it? Why didn't you expect that? What were your EA's results during automatic tests?

You can't predict active market movements. Tests over the last year on two pairs showed larger profit than on three. That's why I decided to use these two pairs.

It's unexpected. Your EA is trend following. Would a flat period be fatal for it? What is the mechanism of Stop Loss and can it automatically adapt to different phases of the market?

The EA works on the daily timeframes when determining the trend, and in this case, the flat has virtually no effect on trading results. The Stop Loss value was optimized and is always set as 150 points on the two pairs. 

How does the EA exit positions - at a stop level or the EA closes it by the market?

The EA can close a position in two ways: by a reversal of trend detecting indicators on smaller time frames or at a stop level.

Do you have many strategies in your arsenal? Where do you find the ideas? What do you think is the most useful at MQL5.community?

I follow publications in runet, forums, and try to find a grain of truth in every new idea, process them and apply these ideas have given my experience. New ideas give impetus to the emergence of other new ideas. And the introduction of these new ideas makes it possible to gain an advantage when working in the market.

Have you perhaps noted any interesting EAs in the Championship?

We follow some multicurrency EAs in the Championship, which can be our competitors.

Can you name some?

Well, I think that a potentially dangerous multicurrency Expert Advisor is enivid, now it goes to the 6th place. But for more than two months, everything can change.

Is your current Expert Advisor a result of compliance with the Championship Rules? In other words, did you need to sacrifice something or vice versa the ATC teaches to write EAs for the selected strict conditions? 

The Expert Advisor was developed for real trading with real investors. For the Championship, we had to redesign the money management system and set a higher risk rate.

What advice would you give to those who want to win the Championship? 

I believe that a multicurrency Expert Advisor is required for winning the Championship. In addition, larger profits can be earned only during trend, so an EA must detect the trend.

Do your friends and colleagues know that you trade Forex? And do they know that you participate in the ATC and are its current leader?

My friends know that I trade Forex, but colleagues don't. I haven't told about the Championship to anyone in order not to overlook.

Can you wish anything to the participants of the Championship?

Good luck, success and prosperity to all of them!

Thank you for the interview, Sergey. We wish you and your father successful trading.