NTR and BDR

 

After the good acceptance of LVS, we have decided to change investment policy of two of our darwins (NTR and BDR) to offer more investment possibilities to our followers.

During December 2017 we have let open trades in NTR and BDR to be managed until their normal closing while new portfolio’s sets are opened. Once the changes have finished we would like to give more details about these darwins and how we use them for our personal trading.

NTR and BDR work only with breakout volatility strategies. They do not have scalping systems or retrace systems. Both of them work on several currencies and timeframes (from 15 minutes to 1 hour).

The difference between them is that NTR always trades in the direction of the breakout trying to get profits of the “trends” and managing the trades using partial closures and breakeven. In other words, it is a directional portfolio.

On the other hand, BDR trades in the opposite direction of the movement opening trades once the breakouts have been consolidated. These reversal trades pursues the following principle: the stronger the break, the more likely it is that the movement will lose strength and the price will turn around. The portfolio can be considered “reverse”.

As a general rule, NTR will enter faster on a volatility breakout while BDR will wait for a consolidation of the movement to enter. Also the duration of both darwins will be different: longer in BDR than in NTR.

According to our backtests, diversification of currencies and timeframes will significantly improve profit / drawdown ratio in long term. Keep in mind that the fact of using only one kind of strategy on NTR and BDR can lead to larger volatility and lateral periods.
 

How to trade between the darwins?

 
LVS portfolio has breakout volatility in both directions, so one idea it would be to give more weight to one type of strategy with respect to the other through BDR or NTR. For example, if we see that LVS performance is positive and BDR is negative on the same period of time, it is most likely that the “directional” part (NTR) has made the positive performance. This indicates that it could be interesting to buy BDR at this moment of weakness and increase the weight of the “reverse” part of LVS.

Another way to trade could be using NTR and BDR together at 50% and rebalancing them periodically. BDR + NTR portfolio is very interesting because the styles “directional” and “reverse” are complementary and very uncorrelated.

Finally, we want to thank for the trust that investors and followers are giving us. For any questions we are at your disposal.

 
Enrico and David
Feycox Development S.L.

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