Trading Risk Lessons from a Real Story
Debora Rosciani
Well, you were still excused from your strategies, considering that you’ve been glued to this stage, and with great benefit to the entire audience, of course.
I’ve neglected you for a little too long, and I’m sorry, but now the entire stage is yours.
And Paolo Villa, we’re now going to tell your story, which is also very interesting and includes a period of drawdown that you may want to share. But that won’t be the first thing we tell the audience, otherwise they’ll think, “Did you invite this poor guy here just to talk about a difficult period for his strategies?”
Paolo has been a student since late 2022. He’s the general manager of a plastics manufacturing company, so he also has another professional career. He was already trading before discovering systematic trading, but then he realized he couldn’t balance his job with his trading activity. And that’s where his story as a systematic trader began.
Did I describe the beginning of your journey, including your experience with Unger Academy, correctly?
Trading Profits: Not Every Story Is Profitable
Paolo Villa
I’d say so. I feel a little like the odd one out here, because everyone else is either a profitable trader who’s made 50,000 or 100,000 euros, or they’re geniuses, or they fly airplanes… So yes, compared to everyone else here, I feel like I’m in a slightly different category.
Yes, the story you told, Debora, is exactly right. As for my job… I don’t own a company, I’m an employee. I’m the general manager of this plastics manufacturing company in Pavia, and in my opinion, that job isn’t compatible with trading because, as we’ve said and as you’ve also mentioned throughout these three days, trading can’t just be a hobby. It’s something that requires your attention.
The discretionary side was basically impossible to reconcile with my job, so I decided to look for something that could make the two compatible. And systematic trading, at least according to its basic definition, seemed to fit the bill. That’s how I found Unger Academy.
I don’t even remember what the trigger was that led me to you. Probably an ad or something… Google was already showing me the things I was looking for, so that’s probably how I ended up here.
And, well, yes… Now I don’t know whether I should talk about the drawdown or not.
Debora Rosciani
Whatever you prefer! I’m sure that’s the part everyone is most interested in: when and how it happened, and how you started again. Because, as Andrea rightly said, your work is also about this: starting again.
Paolo Villa
Absolutely. And thank you for giving me the opportunity to talk about it. That’s exactly what starting again means, because these stories aren’t always profitable.
I feel a bit like I did yesterday: I was dancing next to Andrea, and we were the only two boomers left among all the young people, from 11:30 until midnight. That’s kind of how I feel now.
Debora Rosciani
So you’re still full of adrenaline from all that dancing.
Paolo Villa
Surrounded by all the others, all young people, all kids. I think they were all Academy people having a great time.
Debora Rosciani
Everyone here is a student, so by definition…
Paolo Villa
No, but I think the people who stayed until the end were all staff members. There weren’t any students left.
Debora Rosciani
But one thing we can say, Paolo, as I understand it, is that the drawdown was Trump’s fault. So, as long as we can blame him for everything…
Live Trading Results: +300% in 18 Months, Gone in 100 Days
Paolo Villa
Well, yes, I’m happy to blame him. But I also think it’s only fair… What I really want to emphasize is precisely this: blaming other people, blaming bad luck…
I think that’s the easiest thing to do, but it isn’t honest. What I mean is that the one thing I hope I’ve gained is a certain degree of awareness, an awareness of my mistakes.
To briefly summarize my story, I purchased my first course in late 2022, but I really started in early 2023. I began simulated paper trading in June 2023 and then went live in October 2023. From then until February 2025, so in just under a year and a half, I made more than 300%.
Debora Rosciani
You deserved an Oscar, that’s right.
Paolo Villa
I would have received the bull, but today I think you’re going to give me a bear. A grizzly bear, today. No, no, it’s not worth applauding, just listen to what happened next…
From February 18 to May 31, exactly 100 calendar days, I lost it all. So that takes some skill too…
And that’s when psychological mechanisms come into play. I didn’t feel like a genius before, and I didn’t feel like an idiot afterward, but I learned that losing a lot hurts far more than earning a lot feels good.
Debora Rosciani
Behavioral finance explains that very clearly.
Paolo Villa
It’s a psychological aspect that you need to work on and feel prepared for. I don’t know whether it has changed, but I hope so.
Overconfidence: When Big Gains Increase Your Risk Level
Andrea Unger
In Paolo’s case, which I’m glad he had the opportunity to talk about – not because it happened, of course, but because he could share it – I believe there was a degree of overconfidence built up during the good times. In other words, if you had questioned yourself during the good period and asked, “Why am I making so much money?” The answer might have been, “Because I’m good and the Unger Method is phenomenal!”
But be careful… As I often say, when you lose a lot, you obviously look at what you did wrong, and that’s good. But you should do the same thing when you’re making a lot of money too, because when you’re making a lot, there are two possibilities.
Either something unusual happened, meaning it was partly due to chance, but in a positive way. Just as something Trump did had a negative effect, you can also happen to be on the right side at the right time. Or you may be pushing too hard.
And when you’re pushing too hard, you should recognize it, because you know that if things start going differently from the way they were going at that moment, unfortunately, what happened here can happen.
In this case, starting again has to begin with an analysis of the initial excess, or the excess that developed when you saw those early gains and just kept going and going and going…
Multiply Your Gains, Multiply Your Losses
This happened to me too. It happened to me when I was starting out, when I thought that if I made 1, I just had to multiply it by 10 and I would make 10. Yes, but I was only looking at the positive 1. I wasn’t considering a negative 1, which would then become a negative 10.
This is extremely important. And the fact that he reached 300% means that he had applied the method properly and had done good work. Now the risk side needs to be analyzed and structured, but the foundations are definitely there. And I’m convinced that, if you aren’t already recovering, you’ll soon be back to being…
Risk Management: Trading at the Limits of Your Margin
Paolo
I hope so, I hope so. And I would say that my additional fault is that I did everything knowingly. It isn’t that I wasn’t aware of it. I’ve always worked right at the limits of my margin. In some ways, I still do, although now I’m, let’s say, shifting toward options.
Besides allowing me to use your programs more passively, which is very compatible with my job, because when you work from 8 in the morning until 8 at night, you’re basically stuck there.
One of the reasons I switched to systematic trading was that I couldn’t walk out of meetings at 2:30 just because economic data was being released.
