Interview with Tim Fass (ATC 2011)

Interview on Automated Trading Championship 2011 from 28.10.2011.

A student from Germany Tim Fass (Tim) is participating in the Automated Trading Championship for the first time. Nevertheless, his Expert Advisor The_Wild_13 already got featured at the very top of the Championship rating and seems to be holding his position in the top ten. Tim told us about his Expert Advisor, his faith in the success of simple strategies and his wildest dreams.

Tim, how long have you been acquainted with trading?

My brother (Golomolo) and me have been investing in shares since quite a time. But a year ago, my brother found the possibility of automated forex trading. It was short before last year's Championship. He had the know-how about shares and currency and I already knew a lot about programming. So we started developing our own Expert Advisor with MQL4. This EA we developed has been taking care of our money since four months now and it is doing its job quite well. But for the Championship of course we needed more profit, so we decided to improve our program separately, and each of us developed a Championship program of his own. But since we have different programs and both the know-how, it should not be against the rules.

So, you are writing trading programs. Is your education somehow connected with programming or hard sciences?

Now I am trying to finish my bachelor in mechatronics. This case of study helped me a lot in programming an EA because I already used C++ which is quite familiar to MQL4 and luckily I already had experience in object orientated programming, which helped me to understand MQL5.

You trade with your brother. How do you share your duties? Who finds a trading strategy, who does programming?

We are both working quite independently. He learned everything about programming very quickly, so each of us is trying to find new trading strategies and to implement them, separately in our spare time. If we find a good article, program a good function or have a problem, we help each other by exchanging our experience. We are both student who sometimes have a lot of work and sometimes a lot of free time.

Because of our different backgrounds I am normally trying analytics and mathematics based trading strategies, while my brother is using trading strategies more based on indicators.

But we invest our money together with the best program of both of us.

But in the Championship he is not doing as well as you do. Although your charts are similar - you both had a smooth upward period followed by a fall down. Do you use similar strategies?

Three month ago we decided to improve the EA we were using to earn money separately, because we knew that we will need much more profit and will have to take bigger risks for the Championship. I have seen his program once or twice - it is using fundamentally different ways to achieve this but our programs have the same roots, that is why the general shape of the equity curve is similar. Actually his program made a pretty good picture in the simulation too, I guess he just had bad luck.

Your strategy attracted attention for its slow but stable increase in the balance. Was it intentionally optimized so? Does its prototype that you use in real trading show the same smooth increase?

Yes it generally shows the same smooth increase. I wanted a program that is not acting too chaotic, because it is much easier to tell if it is effective or needs a new optimization. That is why I prefer a program with small but reliable profit. It is achieved by the large stop loss while placing the order.

The resulting problems are massive but rare loss trades; the key is to keep them as rare as possible. Also in optimization I preferred more stable sets of variables with the profit factor of at least 3.

With my three loss trades in one week, I was quite unlucky too, hopefully it will get better soon.

Your Expert Advisor places pending orders around the current price. What principle does it use to place such orders?

It is using a breakout system based on the ZigZag. Of course there is a little more behind it, but I do not want to say too much, because if it is running good I might be able to sell the system, who knows.

Certainly yes, the EA is not trying any fortune telling, it is simply trying to indicate and use existing trends to make sure profit.

And what's its timeframe? How many timeframes does your EA use for calculations?

The EA is only using the 15 minutes timeframe for calculation. Besides the Zigzag, it is not using any further Indicators. I guess with just the 15 Minutes chart information plus the ZigZag it is a rather simple input.

Since the EA is using existing trends, it is running the best with a clearly defined trend. On the other hand the EA is not able to trade within a flat, because in a flat the Zigzag generated highs and lows closer to each other, and therefore many wrong signals are generated. So a flat is the most common reason for the loss trades. I managed to filter most of them but I could not find a satisfying way to indicate flats.

Order comments contain "321". What does it mean? Is it connected with the popular pattern system "123"?

No, not at all. It is just the EA's way to identify orders placed by the EA and to prevent errors. A rather randomly chosen number.

Why does the number of orders in one direction differ from that in the other direction? As well as the volumes differ. How does your EA decide it? Is it connected with the probability of price movement in a certain direction?

I am sorry, again I do not want to tell too much in this case. But that much is obvious, I am using slightly different strategies, based on the direction of the trend. It just showed up to be the better than using the same strategy for both up and down trends.

Are you satisfied with your Expert Advisor? Does it exactly follow its algorithm?

The first two losses were unpreventable, with the last one I am not sure, I will have to check that. Besides that the EA is not always doing what I want him to, what is most likely because I had not much time for troubleshooting in MQL5. Future will show if I am satisfied.

Still your Expert Advisor shows good results. Did you expect that? What did you feel when it got featured at the top of the ATC rating?

When I saw that, I was extremely happy and a little proud. But I did not expect three losses in a row. I wish I will be in the top ten in the end - that would be awesome.

Your EA's name is The_Wild_13. Why did you choose such a name?

I had quite some trouble finishing it in time, because the automated testing of the Championship simply always found more problems. It was the 13th version of the program which was finally accepted. I remembered to a child story I loved (Jim Knopf) and gave this name to my EA. There is no deeper meaning in it.

It had quite a smooth character, and now it shows its wild character. When we were preparing for the interview, it was on the 43th place, now it's on the 17th position. Does its character reflect your personality?

Well in my case it might be fitting: rather smooth but with large deeps. But I do not think that you can really guess on the character of a person by his preferred EA. To win here you need a more risky EA but to invest your money you need a more stable EA, it is rather dictated by the circumstances.

So in live trading you use EAs. Have you ever tried manual trading? What do you think is better - automated or manual?

I tried manual trading with a test account without real money. I was not very successful because I have too much emotions and I can't watch charts 24 hours a day. In my opinion the automated trading is better, because computer programs are only making rational decisions and never betray their strategy because of fear or greed. There are for sure some people who have the knowledge and the ability to make manual trading but I am not one of them. Besides, once you have good program for automated trading you do not need to invest that much time anymore, because the program is watching the chart for you and you just need to optimize it from time to time.

You are an experienced programmer and you can compare different languages. Do you think MQL5 is adequate for implementing your trading strategies? Is it more convenient than MQL4?

Since I started with MQL4 a year ago and MQL5 three month ago, I do not think that I am able to have a qualitative opinion. MQL5 seems more complicated to me than MQL4, because you have to define classes for a lot of things you could do with a simple command in MQL4. On the other hand I heard a lot of good things about MQL5. My experience shows that a linear programming language like MQL4 is more fitting for programs that are following a rather simple waterfall scheme, what is fitting for many good EAs. But if it is getting more complex, it is useful to implement in an object orientated programming language like MQL5. So both have their strength and their weaknesses and I do not want to decide between them. But in the near future I will use MQL4 because I am more familiar with it.

You say "rather simple waterfall scheme". So a profitable EA does not necessarily need to be complicated, does it? Is that the reason why your are using only one indicator and one pair EURUSD?

Yes, as an engineer I know that the most simple solution is most often also the best.

As next step I also experiment with the genetic algorithm and analysis, but I think also a simple EA might be as good as a vector machine.

You have created an EA that is earning money for you. Do you think that trading forex can bring enough income? Or can it be only a source of additional money?

Some days when I see the simulations and calculate that I will be a millionaire in five years if the EA is making 20% per month, I start having the wildest dreams about what I will do when I get rich. But except for those daydreams, I try not to hope on this money. I did not invest more than I could afford to lose and I know that still it is a risky thing. Of course it would be great if I could live from it and could do whatever I want.

Can you tell us one of those wildest dreams?

Well, living in a castle would be nice and having my own underground hideout full of high technological machines like a superhero :) What I would really do, if I had a lot of money, is running a science company, to do research in biotechnology and mechatronics, not only ruled by profit. That is what I would really like.

That's a good dream. May it come true. A lot of people are watching the performance of your Expert Advisor. What can you say to them? Can you wish something to participants?

To those who are watching: Thanks a lot for your interest. Till now none has developed a perfect program, so we all still need luck. That is what I wish to the other participants: Good luck.

Thank you for answering our questions. Good luck.