Luis, first of all, we would like to know about how trading is developed in Brazil. Can you tell us a few words about it?
Till 1999 Brazil adopted fixed exchange policy. After the change to fluctuating rates policy, the law changed too slowly, so the law here must still be adapted for currencies trading. Today only Banks and authorized exchange houses can trade currencies inside Brazilian boarders. However, investments (whatever they are) outside Brazil are fully allowed.

Why have you named your Expert Advisors GUMASA, what is the meaning of the word?
The name came from: GUstavo, MAriana and SAbrina... They are my children.

What are advantages of automated trading, in your opinion?
Automated Trading frees time and 24-hour watch. But the most important thing is that it comes together with the necessity of real research, serious traders won't compromise real money before being assured they have an automatic system with long-term positive (and greater than benchmark) payoff. That is why I can't live without MetaTrader.

Luis, your Expert Advisor is confidently keeping top places at the Championship. What makes your Expert Advisor so successful, in your opinion?
GUMASA v. Competition came from GUMASA v.17, which had truly long-term positive expectancy for its returns, no recurring parameters adjusting. Meaning it has several mechanisms to self-adapt to market changes. This feature brings to v.17 the possibility to remain profitable to a much bigger number of market scenarios (but not all) than a usual "simple-strategy" expert. V. Competition is an (one sleepless night) attempt to adjust v.17 to the new challenges brought by the Championship.

Luis, it would be very interesting to know a bit more about your adaptation mechanism. Can you reveal this information to public?
There is a myth among the newcomers (course sellers repeat it a lot): The simpler the trading system is the better. There is nothing farer from the truth! Why should a simple Trading System be profitable for such a complex phenomenon as the markets?

My Trading Strategy development paradigm is:

• Simple Trading Systems are very good for very strict subsets of markets reality, that's why they work well for short periods of time.
• To manage to cover a larger number of market scenarios, I choose to use different strategies, each one optimized for its scenario.
• Proper identification of the current scenario and the choice of the strategy come next.

Number 3 is most important and most difficult, it requires extremely hard work and is IMPOSSIBLE without an advanced research tool (as MetaTrader).

Ok, Luis, it looks like your Expert Advisor is very complicated. Can you say what indicators are used in it? Did you develop your own analytical tools for it?
Yes. GUMASA v. Competition uses only MT-embedded functions like Moving Average, Moving Average Convergence/Divergence, Average True Range и Standard Deviation. I have developed some indicators since 2004 and people can find them on the forums, websites dedicated to MetaTrader and my own site http://www.damianifx.com.br/.

You wrote your Expert Advisor would need 8 months to succeed in real trading and you had optimized it for three month. What is the reason for such statement and what changes did you make to your Expert?
I am usually a prudent person, may be for this reason I have doubled the biggest sequence of months underwater of GUMASA (4 months) and have put it in the description.

About the changes... The v. Competition is very simple. However, v.17 would never have any chance. It is like a racing car that doesn't have airbags, luxury, durable engine components, but during a limited time is much faster than an every day car. So, some trading filters were simply taken out, others were substituted and bet sizing is much more aggressive. In fact, a very unusual non-linear function with negative concavity was used in the other to size the trades.

Your Expert Advisor is one of risky ones. It keeps many thousands in open positions. Do you suppose this risk to pay off?
That's because GUMASA in fact uses very distant take-profit targets, as well as stop-loss prices, for some of its trades. However, if you take a closer look, you will understand that nor the Balance neither the Equity shows the real situation of GUMASA. For example, some time ago, GUMASA was showing something near $10,000 of non realized profits. But in fact, at least 50% of the profits were already guaranteed as the stops were moved into profitable prices and, also, as consequence of hedge trades. I must add, however, that the higher leverage (by leverage, I always mean my choice of the trade size, and not that 100:1 margin leverage) plays its part, too, but it has nothing to do with the system.

You say that only 50% of profit was guaranteed. Why don't you use your own mechanism of positions closing? In this case, you could gain 75%, for example.
To be sincere, I did not take enough time to make v. Competition "tuning", so I am not sure yet if I made the right choices (guess we will find out that on the 23rd of December). But one thing I can say: the original version (v.17) does not close trades either. I have tried lots of strategies for closing trades and only "take-profit" and "trailed stop-losses" were profitable on the long run. Obviously, that's a characteristic specific to GUMASA.

Your orders placing system is not simple. Can you give more details about it?
As you said, it's not simple, but I think I can help the understanding. First, it does not use breakout strategies; on the contrary, for the trend mode it tries to "negotiate" prices, meaning it waits for minor corrections. This minor counter-trend feature becomes predominant when the trend vanishes given the way to sideways market.

Are you satisfied with the results of your Expert Advisor or would you change anything in it?
Satisfied yes, but already detected some improvements to make (for the Automated Trading Championship 2007).

Hendrick is now developing the next version of its Phoenix. Do you have any ideas about development, too?
GUMASA was more than one year old after it had managed to achieve long run profitability. Since then, I have been improving it. Lots of ideas are under test. There is no fare-the-well in this business, it is a statistical and dynamic game, which is an old idea (see the "Principle or Ever-Changing cycles"). So anyone who declares his or her Trading System to be definitive and most effective one clearly has no clue what trading is all about. Hendrick at his highly sharp intelligence knows that and I will ever follow such examples.

Do you suppose yourself to take the prize place on the 25th of December?
At this point, still 5 weeks to go. I can only say that I HOPE so.

Thank you very much, Luis, for your interview. We wish you good luck!