Thank you for the reply, I could definitely see where LUMN would be viewed as a falling knife. When I spoke to TyphooN about the buy time he picked for LUMN he showed on portfolio where he bought LUMN at 1.01 on 7/01/2024.
I did share your response with him, and he stated he would make adjustments to be in more than 1 trade versus having his account fully dedicated to 1 trade at a time.
If interested here are the questions I asked him, with his answers in bold text, I do appreciate your response
1. Technical Issues:
How do you plan to handle technical issues like the "closed exposure" bug you experienced when closing and rebuying positions? What steps are being taken to prevent similar bugs from affecting your trades in the future?
I report all issues and concerns directly to Darwinex, I have a close professional relationship with them. The platform is under great care with their proactive team, and they follow up with me on the root cause and solution to the reported problem. Another bug that I reported to them was related to margin, I posted a screenshot of this on my website in the "About" section, sarcastically saying I was roleplaying as George Soros.
I am a technically inclined individual, and small details tend to jump out at me like a sore thumb. My risk management system and strategy will always be managed based on changing information at all times.
2. Platform Risks:
Are there any other risks related to platform bugs or restrictions (such as "close only" mode) that could disrupt your positions in the future? Has Darwinex addressed this specific bug, and what measures are being put in place to ensure it doesn’t happen again?
I spoke with the Darwinex team about the delisting of LUMN, and it was escalated internally on their side. I received a personal assurance that any future delistings would be communicated more effectively, in hopes of making sure something like this does not happen again
3. Delisting Risk:
How do you plan to manage investments in stocks that might be delisted in the future? Do you have a process to monitor stocks for potential delisting or suspension? Would setting up alerts help mitigate this risk?
I trust in my system, and make adjustments as needed over time as new data presents itself. I export Symbol data from Darwinex's MT5 server on a daily basis, and look for listings, delistings, and other anomalies.
4. Position Management:
Are you considering implementing stop-losses or take-profit targets to avoid prolonged drawdowns, especially if you cannot monitor the position closely? How will you adjust your strategy if a stock goes into "close only" mode? What steps will you take to limit any potential impact?
I always have Stop Losses and Take Profits in place, adjusting them throughout the life of the trade if there is any shift in sentiment.
5. Liquidity and Exit Strategy:
How do you assess the liquidity of the stocks you invest in, and what are the risks if you cannot exit your position as planned? What actions will you take to ensure that you can exit positions optimally, especially in the event of restrictions like "close only" mode?
I can always exit my positions optimally, as I am trading a virtual account at Darwinex zero (so long as the symbol is listed and functioning properly). My Risk Management EA can close thousands of positions asynchronously.
6. Risk Management:
What additional risk management techniques are you considering to ensure your strategy remains viable in the face of unexpected disruptions (e.g., delisting, market volatility)? Would you consider implementing hedging strategies to protect yourself against potential risks like the one you faced with LUMN?
I am constantly assessing VaR of all positions, looking to maintain a predictable portfolio VaR to the Darwin based on my input actions. I am planning to trade 2-3 symbols per Darwin instead of only 1 to mitigate this situation in the future.
7. Diversification:
Are you planning to diversify your portfolio more to reduce excessive exposure to any single stock or asset class? How can you balance your long-term positions with short-term trades to help manage overall portfolio risk?
As mentioned in 6, I plan to have 2-3 trades per Darwin vs the 1 that I had when I was fully dependent on LUMN.
8. Platform Communication:
Were you given clear communication from Darwinex regarding any important changes to your trades, such as the "close only" status or delisting? In the future, how can you ensure that you receive timely and transparent updates about changes that could affect your positions?
There was unfortunately no communication from Darwinex about the delisting of LUMN. Only after I communicated to their Discord community that multiple symbols were delisted was this communicated to me in a private e-mail chain (over a week after my initial report). I believe that the future at Darwinex will include more transparency between Darwinex and traders about policy changes. They understood that I was not the only trader impacted negatively by this.
9. Review of Strategy:
Do you feel that your long-term trading strategy is flexible enough to adapt to unforeseen disruptions like technical issues or regulatory changes? Would you consider setting up contingency plans or exit strategies in case unexpected events arise, such as delisting or changes in platform rules?
I am confident that my trading strategy is flexible and adaptable to any unforeseen changes that might arise, including adjustments made around disruptions, technical issues, and/or regulatory changes. I have spent years developing my strategy which does includes contingency plans and exit strategies based on the data presented.
