Darwinia contest

[CavaliereVerde]

Back to spanish class @IlIlIlIlI

 

[CavaliereVerde]

Is it more useful? ...
Is it more rewarding?...

IT IS MORE CHALLENGING !
😁

 

[CavaliereVerde]

I'm curoious whether/when they will change the calculator under "more information" on the DarwinIA page to include the VaR.

I think the calculator/simulator is gone...
It was useful for existing traders but not attractive or challenging to new potential customers.
Medals, awards, shining colors, gamification to make Darwinia more attractive.

 

[CavaliereVerde]

Traders on average will not earn more because of these changes.

I have to refine my statement.
The new setup is much better for traders with low trading equity.
AZG by our friend @ASGTrade is the perfect example:
>>https://www.darwinex.com/darwin/AZG
account equity of 1500 but normalized equity of 4500 .

Darwinia 2022 will be better than Darwinia 2021 but not as good as Dawinia 2018 .
In 2018 we had 4 millions fully deployed at var 10% and performance fees at 20%.

 

[QAVinversion]

yes, in my case I went above 10,000 because of the investment in my darwin.

 

[CavaliereVerde]

UYZ is vindicated by the investment in own darwin while ZVQ and ERQ are penalyzed.
This "skin in the game" concept was asked by users in the old community back in 2018 just after the introduction of equity multipliers.
It comes 3 years late but it is more fair for traders and it is a step in the right direction.
The first step in the right direction after many steps in the wrong direction we have seen in 2020 and 2021.

 

[IlIlIlIlI]

Currently my Darwin is flat so I could play the investor game with it to look which effect it would have to a hypothetical DarwinIA allocation.
The trader equity shown for DarwinIA when I'm fully invested in the trading account is 3,534.85 €.
If I take about 10% of the account and invest the minimum amount of 201 € in my Darwin (with 3x leverage) it decreases to 3,400.85 €.
The Darwin investment is not an advantage here, the main reason is the VaR calculated currently to more than 52.24 % which is cut to 32.5 % for the DarwinIA calculation.

I assume it can be an advantage for the trader if the VaR of his Darwin is below the cap of 32.5%, as long as his min. equity of the month is below the equity cap .

 

[FXforfun]

Currently my Darwin is flat so I could play the investor game with it to look which effect it would have to a hypothetical DarwinIA allocation.
The trader equity shown for DarwinIA when I'm fully invested in the trading account is 3,534.85 €.
If I take about 10% of the account and invest the minimum amount of 201 € in my Darwin (with 3x leverage) it decreases to 3,400.85 €.
The Darwin investment is not an advantage here, the main reason is the VaR calculated currently to more than 52.24 % which is cut to 32.5 % for the DarwinIA calculation.

I assume it can be an advantage for the trader if the VaR of his Darwin is below the cap of 32.5%, as long as his min. equity of the month is below the equity cap .

Sorry. I don't understand what's the point to invest in your own Darwin instead of putting your money directly into your account. As an investor of yourself you are paying a fee for nothing. Also, in my case; when my strategy wins it overperforms my Darwin for a few points.
Could you ellaborate that idea please?

 

[IlIlIlIlI]

Sorry. I don't understand what's the point to invest in your own Darwin instead of putting your money directly into your account. As an investor of yourself you are paying a fee for nothing. Also, in my case; when my strategy wins it overperforms my Darwin for a few points.
Could you ellaborate that idea please?

With a VaR of about 9% your trading account will always have more volatility and more profit or loss than your Darwin with a VaR of max. 6.5%.

Since December 2021 the own investment of the trader is added in the calculation of the min. equity for the DarwinIA allocation.
I wanted to check whether it could improve the DarwinIA allocation to invest in the Darwin instead of the trading account to raise the equity used for the allocation.

First idea was if you use 3x leverage in your portfolio your invested capital will be tripled so if I put 67 EUR in your portfolio I could invest 201 EUR.
So my investment at Darwinex was raised by 134 EUR by the triple leverage of the 67 EUR taken from the trading account to a Darwin investment, from about 700 EUR (trading account) to 838 EUR (633 EUR trading account plus 201 EUR Darwin investment).

Does that work for a hypothetical DarwinIA allocation for my Darwin?
I think no, as the trader's equity shown decreases by 134 EUR as shown above. I assume, also an allocation below the equity cap would decrease.

 

[CavaliereVerde]

The point is that those 67 euros work even better on you trading account with a var of 50% that counts as 32% for darwinia.
To say in another way, the multiplier for leveraged investing is x3 while in your trading account you can reach x5 , so 67 x 5 is 335 total equity instead of 200 .

 

[trilobite]

Does that work for a hypothetical DarwinIA allocation for my Darwin?

Darwinia equity = Trading account equity x (VaR/6.5) + Darwin equity
Current scenario:
711 x (32.5/6.5) + 0 = 3555
Proposed scenario:
644 x (32.5/6.5) + 201 = 3421

It appears that the proposed change would reduce your Darwinia equity and you would also incur the management fee and the 5% cut of any performance fee.

 

[IlIlIlIlI]

Darwinia equity = Trading account equity x (VaR/6.5) + Darwin equity
Current scenario:
711 x (32.5/6.5) + 0 = 3555
Proposed scenario:
644 x (32.5/6.5) + 201 = 3421

It appears that the proposed change would reduce your Darwinia equity and you would also incur the management fee and the 5% cut of any performance fee.

For DarwinIA the min. equity is relevant, not the current one.
For ILR the following calculation is valid for December:

321.85 EUR (min. equity 12/21) x 32.5/6.5 + 0 (Darwin) = 1.609.25 EUR for DarwinIA allocation calculation

Hypothetically, if ILR would rank on #150 - there is a capital cap at 1,923.08 EUR for 25k allocation - there would be allocated 83.68% of the 25k prize money, which is about 20.9k allocation for a minimum equity of only 321.85 EUR on my worst day in December.

That looks like a great improvement against the calculation rules until November.
Unfortunately valid only for high VaR traders, and best for accounts with low equity.
(If I'm wrong here, please correct me.)

So I must come to the conclusion, that Darwinex now wants traders to move capital from their trading account to the investment in their own Darwin.
It would be interesting to know whether that can make sense for traders with a VaR much lower than mine.

 

[CavaliereVerde]

So I must come to the conclusion, that Darwinex now wants traders to move capital from their trading account to the investment in their own Darwin.

This is the easy and expensive way, just buy your darwin and increase your total equity.
Quck and easy but makes you pay management and performance fee to Darwinex.
The optimal way is just to increase tradesizes and increase your var.

Low var trading made sense before this channge, trading one microlot wtih an equity of 10k doesn't make any sense and Darwinex doesn't make money with parked money and small sizes.

Suppose you were trading 3000 with a var of 6.5%, now you can withdraw 2000 , var will go to 20% and when it will happen your total equity will be back to 3000 and you have 2000 to use for something else

 

[trilobite]

The optimal way is just to increase tradesizes and increase your var.

Hit the nail on the head @CavaliereVerde, but how to achieve that without destroying D-Score (and those lovely rebates for scores above 60). I was thinking along those lines and reduced the trading account equity by 75% and did a test trade of the same lot size as before. The risk manager didn't like it. With a very low VaR, a higher leverage trade becomes huge leverage when it is multiplied up. I'm a bit stuck now as how to safely increase the VaR on JKL. Any suggestions gratefully received. I thought maybe do some longer lasting low leverage trades to gradually change it. The problem with using higher leverage whilst the VaR is super low is that the Darwin could become very volatile (and I don't want that).

 

[CavaliereVerde]

reduced the trading account equity by 75%

This is a bit brutal...

Any suggestions gratefully received

Withdraw 25% per month.

 

[IlIlIlIlI]

This is a bit brutal...

Withdraw 25% per month.

I would take 25% per week (or increase the trade size by 25% per week) and watch the Rs attribute which is slow, as the calculation uses the last 45 trading days. If you didn't get the wrong moment to start, the Pf attribute can compensate it partially if Rs starts going down in its score.

 

[CavaliereVerde]

BTW DScore is not calculated from Rs anymore.
Changing var harms Risk Stability but I prefer a Rs score 2 points lower with a total equity 3 or 4 times better, that translates in much more allocation.

 

[trilobite]

BTW DScore is not calculated from Rs anymore.
Changing var harms Risk Stability but I prefer a Rs score 2 points lower with a total equity 3 or 4 times better, that translates in much more allocation.

Thanks for your suggestions guys. That is one of the strengths of a user forum in my opinion.

 

[trilobite]

 

[CavaliereVerde]

Demo money = seed capital
We should learn from the real pros that make money from trading: the brokers!
Using real money is risky and expensive, seed capital is much better.