Before even looking for traders, one must have the ability to distinguish them, knowing what sets apart a true and proper trader, worthy of being in your investment portfolio.
This is what we’ll show you in this lesson.
Ayondo provides several values regarding its traders’ performances. Some of which, however, may be a bit hard to grasp.
Up until now, that is.
After reading this post, you’ll have gained an understanding of the strengths and weaknesses of the Ayondo traders, which will provide you with a competitive edge over any other investor.
Everything you can find out with Ayondo’s Trader Data
All investors you can follow through Ayondo’s platform are defined as Top Traders.
There are many Top Traders, right now there are well over 1700, but the number keeps growing daily. Clearly, not everyone is on the same level, but they are all structured over a career path that rewards the most deserving.
We’re talking about the Career Level.
Ayondo’s Career Levels for Traders
Top Traders on Ayondo go through a career path, which considers their longevity (number of operating months), their effort (volume of operations), and finally, their strategies (performance % and DrawDown).
Ayondo’s policy, to reward traders who apply valuable and established long-term strategies is definitely attractive for all investors who acknowledge their own work ethic, as they will be able to stand out from the others or, at least, see their worth recognized.
Let’s see how.
Ayondo’s career level divides the Top Trader path in 5 steps:
- Street Trader
- Advanced Trader
- Professional Trader
- Risk-Adjusted Trader
- Institutional Trader
Clearly, moving forward in the career will gain prestige within the Ayondo community, ultimately leading to better earnings.
Here is a detailed explanation which can be found in the table, with the conditions Ayondo requires to progress.
1. Street Trader
The trader must have been working with Ayondo for at least 30 days, have a generated transaction volume of 5 lots ($500,000 of negotiated notional value), a maximum DrawDown of 25%, and a total positive performance of at least 0. 5%. As this is the entry level, this is the only level where Top Traders with DrawDowns over 25% can be found. This is the only level where the DrawDown requirement is not necessary. In other words, if a Street Trader has a DrawDown value of over 25%, he won’t be able to progress to the next levels (unless, over time, his performance improves so much as to lower that max drawdown percentage, making it drop below 25%). This is a stern yet understandable rule, particularly as it regards money investments.
2. Advanced Trader
In this level, the trader needs 60 operating days, drawdowns and trading volumes are still as above, but the total required performance goes up to 1%.
3. Professional Trader
This level is for traders with 90 or more operating days, and a positive performance of at least 1.5%, with traded volumes of 10 lots.
4. Risk-adjusted Trader
Traders need 180 operating days to get to this level, a volume of 15 traded lots, and still a maximum DrawDown of 25% or less; the required positive performance however, is doubled at 3%.
5. Institutional Trader
The highest career level. To achieve it, traders need 365 operating days and twice the volume (30 lots), and positive performance (6%), than the previous level. The maximum allowed DrawDown is still 25%.
Ayondo’s requirements to move forward through the Career Levels aren’t many. Profits-wise, the minimum of 6% over a one-year time span can easily be achieved by a professional trader.
In terms of risk, the fact that Ayondo limits the DrawDown to 25%, a moderately conservative percentage, is an extremely valuable resource for followers.
To sum up, targeting Institutional Top Traders, even the most inexperienced follower should have access to several Top Traders who can provide a certain security.
Ayondo Career Level: a system that favours both traders and followers
Obviously, the highest career levels are also those most sought after by Top Traders, as the percentages of returns on negotiated volumes increase considerably.
The Career Level system, however, benefits us followers as well, as we can build a portfolio choosing from many certified Top Traders.
Below is a table showing the Top Trader’s remuneration depending on the career level
Ayondo Trader’s Ranking List
In this section you can find the list of traders.
As you can see, Ayondo displays its traders by performance, in descending order starting from those with the highest profits.
Let’s see each single item of the list in detail.
The individual picture the trader has chosen to identify his/her profile. While this isn’t a performance relevant item, it can be useful while operating, as it helps to distinguish among traders. Sometimes, less experienced traders use nicknames similar to more popular investors, who benefit from more visibility, hoping that some of the newly registered followers (who often find the names of traders to follow online, without checking), might start copying the wrong trader. The image is therefore useful to better identify the Top Trader.
Here are two images to better explain how pointless the rank is.
When thinking of a ranking system, we usually think of a unique position assigned to a Top Trader within the Ayondo community.
As can be seen in the images however, Ayondo’s rank matches the position of the trader based on the priority order you assign to the list.
For instance, TradAyondo leads the ranking if we are considering the P/L data in descending order. Vice versa, in case of ascending P/L, the first Top Trader is capashelnerdel and, by this logic, TradAyondo will be last in this ranking.
So, don’t think that the Rank value represents merit. It’s mostly just the order of the current priority you’re assigning to view the Ranking List.
As for the picture, the name is used to uniquely identify a Top Trader. Clicking on the name, you will access the trader’s Trading Profile.
Later, we will also inspect all the useful data that can be found in the profile.
The Career element in the column is interesting, as it identifies the level of the Top Trader. The previous paragraph detailed the features of each single career step within Ayondo, so we could say, generally speaking, that Top Traders with more flags, who have higher career positions, are normally more alluring for us followers.
This section displays the time since the trader has opened the last position.
This piece of data is not too useful as it doesn’t mean anything in terms of performance. It isn’t useful as this is not a mean value that could reveal if the Top Trader operates frequently or not. It just tells us how long it’s been since the trader has opened a position; whenever that should be simply depends on the time the analysis is made, and therefore is not descriptive of the trader’s normal practice. It doesn’t serve much purpose.
The performance generated by the trader, in percentage, in other words, how much he/she has earned in percentage (based on the selected time frame). This is an interesting value that, for further analysis, should be measured against other parameters, such as the account’s overall performance, the DrawDown, and operating time. It certainly is a useful piece of data by itself, but it can also mean much more if cross-examined with others.
This value identifies the maximum loss accrued in percentage on the account’s gross deposit. In other words, how steep a loss has been suffered in percentage compared to the total performance of the profits. The higher the value, the worst. As for the P/L, this piece of data can be crucial too, if examined with other parameters, such as the achieved profits. Overall, we could state that, except for some aggressive investment profiles, values which are too high don’t require extensive analysis as they should be excluded beforehand.
– Mly Volatility
This value identifies the oscillation, positive or negative, of the account, in a determined time frame. Extremely high percentages can be dangerous, it could either increment your account’s deposit in a very brief amount of time, but it could just as easily result in the opposite. This factor too, is highly dependant on the time frame of reference being used.
This is the number of followers, both demo and live, following the Top Trader’s operations now. At InvenstinGoal, we don’t see this as a particularly relevant value. It might describe the trader’s popularity, but as you know, if you’ve been reading our posts, a Top Trader suitable for others may not be as preferable for your needs, or anyway may not suit other Top Traders in your portfolio.
Trades per Month is an interesting value as it shows the operating frequency of the trader. Comparing it to other parameters, you can understand the operating style of the trader, and whether he is suitable for you.
Here you’ll find a miniature chart of the Top Trader’s account’s performance since the beginning of operations up to the day of the analysis. The chart is highly indicative of the trader’s operating style and can be intended as a preliminary expression of his skills or of his work modes. Clearly, the best thing would be to enter the Top Trader’s profile and see it in full size, so that you could better view the characteristics of his trades.
Ayondo Trader Profile – Everything you can find out of the Trader
The Trader Profile is a page where Ayondo reports all operating details of the Top Trader, providing you with the chance to study his/her strategy.
Every Top Trader has a Trader Profile, even traders who have just started working with Ayondo, with only a few active operations to show.
The Trader Profile is one of the most useful sections Ayondo provides you with, as it allows you to explore the features of the trader you will entrust your capital to.
All the provided information is extracted from the trader’s operations, which are then processed in several ways to obtain mean values, reports, and concise indicators, all shown on the profile.
Ayondo Trader Profile – Personal Data
The Trader Profile consists of several elements, as usual, we’ll start exploring it from the top, where we can see a first block showing the trader’s personal data.
As you can see from the image, the trader here has been operating on Ayondo as “simplytrader”. Below the name, you can see the profile picture he has chosen.
These two elements are not as granted as you may think, you’ll need them to uniquely recognize the trader. It often happens that popular traders have their name/profile picture copied (Ayondo clearly forbids Top Traders from having the same name/pic, but it can’t forbid similar pictures or names). You’ll need these two elements to be sure you’re dealing with the right trader.
On the sides of the profile picture, you can find two symbols:
Meaning the trader operates with “real money”. Seeing this symbol means the trader uses a real money account. At InvestinGoal we tend to prefer these traders, as they are risking their own money; this leads us to believe they will be interested firstly in making profits with their trading activity, secondly from the commissions Ayondo is paying for the service they provide. However, since the money required to start a real live account is not much, this factor alone can’t guarantee the good faith of the trader.
The star symbol only appears for Top Traders who operate with real money and have more than 350 followers. These traders are defined as “Most Popular Trader”.
“Member Since” will detail when the Top Trader has registered to Ayondo.
– RISK SCORE
This value is assigned by Ayondo. To assess it, Ayondo uses several parameters, such as the leverage used by the trader, the volatility of the traded assets, and more. The values can range from 1 to 10, and you can consider 1 through 4 as low, 5 to 7 as medium, and 8 to 10 as high. Besides indicating the riskiness of the trader, a change of this value will be a signal that the trader has changed operating style. This factor can be a useful warning sign, particularly when rising.
The quantity of followers copying the trader (both with demo and live accounts). Even though this piece of data can highlight the trader’s popularity, it is rarely useful for an objective assessment of the Top Trader’s ability.
The trading experience claimed by the Top Trader. This data is taken from the Mifid declaration made by the trader; Ayondo does not perform any control on this information, which is self-declared.
– Performance Since Start
This value states the profit (or loss) the investor has had since he started operating with Ayondo. It is an important value, but not the most crucial; as we’ll later see, there many more useful and interesting indicators.
The last element in this first block is the “Follow” button, to be clicked if you want to start copying the trader’s operations. Notice: this button, contrary to other platforms, will also appear if you’re already following the trader, save for the fact that, when clicked, you will get a message informing you you are already following the trader.
Ayondo Trader Profile – Performance Since Registration Chart
By default, this section appears as a line chart representing the percentage of profits or losses made by the Top Trader.
In the topmost section of the chart, you can select a time frame to analyse, from one day to the complete operating history.
I set the complete history, to show how the information of “perf. since start “, in the previous block, is much more exhaustive. The value that will be displayed placing the mouse pointer at the end of the orange line (which represents the trader’s performance), will be very similar to that in “perf. since start “.
However, going back to check the performance over the entire history, you will notice that the Top Trader hasn’t been making a profit since the beginning of March 2016.
As shown below, from March 2016, with a recorded value of 70.55%, to the beginning of May 2017, with a recorded value of 43.29%, profits have been dropping.
In addition to the orange line, the purple one represents the trend of the main German index, the DAX (here identified as Germany 30, since the reported value is that of the CFD, but the trend is the same). You can then see the trader’s performance (orange line) compared to that of the main German index (purple line). In this specific case, you can notice that the Top Trader has outperformed the index between 2015 and 2016, losing most of the gained advantage over the last year.
The last element in the performance chart is the “candlestick chart” button, which transforms the line chart into a candlestick chart.
The graphic design changes a bit, and the data will switch from percentages to capital values. However, the capital shown for the graphic representation is artificial, and common to all top traders. A base capital value of 100,000€ is used, regardless of whether the traders have 100€ or 1,000,000€ on their account.
This is a useful tool to calculate the Drawdown percentages of the Top Trader, measuring the maximum and minimum values throughout their operating history.
It must be noted however, that unlike other social trading companies, Ayondo’s calculation of the Drawdown is correct and trustworthy.
Ayondo Trading Profile – Top Trader’s Performance Data
Let’s get to the point and start working on numerical and statistical data of Ayondo’s trader’s performances.
“The Statistics” section, as the name implies, has several statistical values concerning the operating style of the trader. Let’s dive into the details.
This parameter is very important to assess the riskiness associated to a trader. It describes the trader’s fluctuation of returns for a given period. Even though Ayondo doesn’t explicitly state the time frame the volatility index refers to, the formula they use employs a calculation on a monthly basis.
In the specific case shown in the image, this means that, with a 99% reliability, in a month you can expect, a maximum oscillation, positive or negative, of 3.96%.
Unfortunately, the reliability of this parameter is statistical, so it’s not 100%. This means that most of the time, the value 0f 3.96% will be upheld, however there might be cases in which actual values could considerably exceed it (usually upon extraordinary events).
Despite this, the Volatility parameter provides a maximum monthly oscillation index you can expect from the trader’s strategy. So, if you want to double your account’s value (100% performance) in a month, the Top Trader of the image is not well suited, since his average oscillation is of about 4% (not that we are suggesting to try and double your account in a month, which is very risky; we’re just talking about numbers).
– Number of trades
The amount of transactions the trader has made since he started operating with Ayondo. Dividing this value for the number of open market days, you can understand about how many transactions the trader opens daily.
– Winning Trades
These are the trades that have been successfully concluded and therefore have a profit. This value, analysed with other parameters, provides useful information to find out whether the trader might suit your needs. A value of 46.33% indicates that on 10 closed transactions, the trader profited from just about 4 of them. Therefore, you’ll know beforehand that you shouldn’t be disheartened seeing several trades at a loss.
– Winning months
The reasoning is the same as above, but on a monthly basis. So, the value represents the percentage of months which have been closed with profits. A value of 59.38%, as you can probably imagine, means that in a year, there will be about 6/7 months with profits, and 5/6 with losses. The difference, as for the winning trades, is made by the volume of losses and profits.
– Last Activity
This parameter points out the latest operation of the trader. This value needs to be contextualized, as it depends on the trader’s strategy. If he is a day trader, not working for 2 weeks could mean something; if the trader does a few operations per year, it may mean nothing.
– Real Money Trader Since
A trader can register to Ayondo and work with virtual money, and may do it for years, until he switches his account from demo to live; at which point you would see the R symbol on his profile, and you might be led to believe that the results obtained so far have been realized solely with the live account while, for instance, it could be true only for the last month.
Thanks to this information, you can identify the moment the trader started operating with real money. The date may coincide with the beginning of operations on Ayondo or not; in the latter case, it would be worth evaluating the chart of the account’s performance before switching to real money and after, to see if the type of performance suffered any difference.
– Maximum DrawDown
This is certainly one of the most important values. It refers to the maximum loss recorded on the trader’s account, the loss you may incur in if you follow him. You can find more details about this in the Ayondo Drawdown lesson. Of course, what happened in the past is not a guarantee of what will happen in the future, it could be better or worse. However, the reliability of the Drawdown calculation is one of Ayondo’s selling points, as it is one of the most important elements to assess the strategy of a Top Trader, a factor that many other companies underestimate. Here you can evaluate the correct data, with a reliable calculation, and Ayondo itself recognizes the importance of Drawdown, as it is a cornerstone of its Career Levels.
This section is very interesting. The trader here talks about his strategy, in some cases he also provides useful operating instructions for his users, perhaps explaining what a follower might expect from him. Finally, an evolved investor, with at least some experience (what you will become if you follow our guidelines), can already understand the trader’s experience, based on how he trader describes his strategy.
The performance element is a table showing the results of the trader’s strategy, expressed in percentage terms on a monthly basis and divided by years. It is useful to see what can be expected for each month, and whether there have been months (both positive and negative) that should be analysed more thoroughly.
This pie graph represents the assets (trades) on which the trader works on a regular basis, and is ideal to understand the weight of each individual asset for the trader’s strategy.
This section will come in handy when figuring out how to combine the various Top Traders within your portfolio to increase diversification, be it geographic or by asset. This way, you’ll avoid being overexposed on a certain asset at unprofitable moments.
Distribution of the monthly performance
With this histogram chart, you can understand at a glance, the number of months in which the trader has been able to get a certain type of performance. Or, from another point of view, you can see what kind of average performance you can expect for most months.
Metrics of the Ayondo Trader
P/L metrics in %
The Top Trader’s returns, in different time frames, are measured against the leading German index (Germany 30 – DAX) and American index (US500 – S & P 500).
This comparison can be helpful in several ways, two of which are:
Understanding whether the Top Trader’s strategy succeeds in outperforming (better) the main indexes;
How the trader’s strategy acts when the indexes have good or bad performances.
This section has some technical information, which might be harder to understand. We’ve done our best to explain it, as they are extremely useful to understand the Top Trader’s reliability.
This section doesn’t just measure profits against indexes, it also considers other parameters.
– Max. DrawDown (in %)
We’ve written extensively about this in several occasions. It should be clear that, in this case, the smaller the value compared to the indexs, the better.
– Montly Volatility (in %)
There is no rule to understand whether this value is better off higher or lower; let’s just say that the higher it is, the more you can see fluctuation in the capital, either positive or negative. The higher the volatility is, the more the results will vary.
– Sharpe ratio
Sharpe’s index is commonly used to assess the yields of a securities portfolio. It expresses the performance of a portfolio, net of “risk-free returns” (normally determined by risk-free government bonds), relative to the risk of the portfolio itself. The index assesses the Top Trader’s ability to generate high returns, which can offset and justify the higher volatility (and therefore risk) of the portfolio which is required to obtain them. In other words, whether a higher volatility of the portfolio (hence higher risks) yields higher returns.
The higher this value is, the better.
Here’s the simple formula of the Sharpe Ratio:
SR = (RP – RF) / sigma P
- SR = Sharpe Ratio
- RP = Portfolio Returns
- RF = Risk Free Bonds Returns
- Sigma P = Portfolio standard deviation (volatility)
In this formula, portfolio performance, net of the risk-free returns (RP-RF), is measured against the volatility sustained by the portfolio.
So, if the yearly yield of the Top Trader’s portfolio is 10%, of which the government securities cover just 1%, the Top Trader’s over-performance of the government bonds was 9%. However, we can only figure out whether a 9% value is actually a good result, only after measuring it against the risk undertaken to generate it.
If, by hypothesis, the volatility of the portfolio is of 9%, the Sharpe Ratio will be 1%:
(10 – 1) / 9 = 1
If, on the other hand, the volatility of the portfolio is of 20%, the Sharpe Ratio will be 0.45%:
(10 – 1) / 20 = 0.45
From our example, it’s easy to see that, with the same performance, the result obtained with the higher Sharpe index is mathematically more sensible, because it has accounted for less stress and lower risks.
It’s as if two runners cut the finish line at the same time, but one is fresh and relaxed, while the other is exhausted. In the long run, we’d bet on the first athlete, as he has proven to have better means and knowledge of how to use them at their best.
– MAR ratio
The MAR ratio determines whether the average annual returns made by the Trader are reasonably proportioned to the sustained risk, which this time is calculated as the Drawdown.
The MAR ratio compares the Compound Annual Growth Rate (CAGR) to the max drawdown. In this case, the CAGR should be the highest possible multiplication of the max drawdown.
Here are two practical examples to better explain the concept:
Average yield of 20%, with Max DrawDown (maximum loss recorded on the trader’s account) of 10%
20 / 10 = 2 MR
Average yield of 20%, with Max DrawDown (maximum loss recorded on the trader’s account) of 20%
20 / 10 = 1 MR
Upon the same average return, it is preferable to follow the first trader, who has a higher Mar Ratio.
Let’s go back to our example of the two runners, who get to the finish line at exactly the same time (identical average performance). The difference, this time, is a runner has gone through an asphalt road, with simple and small slopes. The other one, at one point, had to go down a deep cliff and then climb back up. Clearly, the preferable choice would be to replicate the track of the first runner, which is easier, because climbing back up from a cliff isn’t always doable, at the very least it’s harder.
– Value at risk (95%, 1m)
This parameter calculates, with percentages, the maximum expected volatility on a monthly basis, at about 95%. The calculation is performed using the Trader’s historical data, so it becomes more reliable as more history is available. It is still a statistical value, with a 95% accuracy, which is high, not infallible. The lower the values here, the better.
Basically, a value of 5% means that, for that specific trader, a deviation (different value) of 5% from his average yield (his average monthly returns) can be expected. Such deviation can be either positive or negative, again, with 95% accuracy, so it’s not infallible.
Extremely high values provide the chance to achieve high profits monthly, but they can lead to big losses just as easily, so this risk must be carefully weighted. This is certainly one of the risk indicators that, above all others, can signal the risk of the strategy being used by the Top Trader, as high values are indicative of high oscillations, both positive and negative.
Ayondo Trader Profile – Position Details
This section lists the currently open positions, i.e. all the open positions on the market the trader has at the time of the analysis.
The Transaction History section is another very important element to analyse and understand the Top Trader’s strategy. It’s a shame all data in this table can not be exported to an excel file.
Within this section is a list of all the transactions made by the trader, sorted by closing date, from the latest to the oldest. The following data is reported for each operation:
- Trade No.: a unique code identifying the trade. This can come in handy if you want to talk to Ayondo’s support, as it is a unique reference of the individual operation.
- P/L: Identifies the sign or direction of the operation. If the trade is a buy, you will see the image of a blue arrow pointing up, vice versa, an orange arrow pointing downward signals a sell.
- Units: Number of lots. It describes how much capital the trader has placed on that transaction.
- SL & TP: In these two columns, you can find the Stop Loss (SL) or Take Profit (TP) prices, provided that the trader has used them for the operation.
- Price: The price at which the operation was opened.
- Exit Price: the price at which the transaction was closed.
- Date Close: Returns the closing time and date of the operation.
- RpT – Risk per Trade: as the expression itself implies, this is the risk borne by the Top Trader for every single transaction. This value considers the average exposure of the open positions of the trader, measuring it against the countervalue of the account. To determine the average exposure, the entry price is weighed against the stop loss, in relation to the entry volume against the countervalue of the account. In other words, if you see a RpT value of 2%, you know that the trader has exposed his account, for that transaction, to a maximum loss of 2% (calculated via stop loss). If you want to replicate the trader’s activity on your account 1 to 1, you know that the potential percentage loss will also be replicated. If 2% for the individual operation seems excessive, you may decide to replicate the operation 1 to ½ (his RpT 2% will become 1% for you). If you believe it’s not too risky, you might decide to double your exposure when replicating his operations (his RpT of 2%, will become 4% for you) or even triple it (his RpT of 2% will become 6% for you), and so on. We’ll dive further in all these details of portfolio management over the next lessons.
- Signal: Indicates how the trader has closed his position, whether through a Stop Loss, Take Profit, or closing the trade manually (Exit).
- Balance: This column shows the progress of the account, transaction per transaction. As we have already mentioned a few paragraphs above, for the “performance since registration” chart, the balance of the trader’s account balance is artificial (especially for privacy issues). Top Trader accounts are considered as if they all had a 100,000€ capital, the calculations are taken from that point on.
In the top right of this section, you can find the “Filter” function button, when clicked, it opens a light box like as in the image below, which offers you the chance to filter the operations per single asset, so you can perform more specific analysis, evaluating how the trader behaves with a currency or index, for instance. Furthermore, you can also set a time frame of reference for the operations (From – To), to be sorted in ascending or descending order.
The only flaw, as previously mentioned, is the impossibility of downloading all this information on an excel sheet, so that you could have the freedom to extract charts or cross data with specific formulas.