Changing Gears

I think Lao Tzu said something like “If you do not change direction, you may end up where you are going.”

I’ve spent time reviewing my strategies which work well for me in my other accounts away from Darwinex and compared them with the performance of the Darwin WET. It is evident that the risk manager works well during times of drawdown but is painfully slow at returning at a rate I find unacceptable to increase more risk for better returns. Any form of flexibility or dare I say creativity is simply SQUASHED!

A long term strategy can and does take days/weeks/months to formulate to get the best return. I think active exposure to the market is evidently penalised at Darwinex, any edge I have with this exposure is quickly eroded with an equity recording at month end. When it comes to pounds and pence the logic doesn’t align with my own trading. If a drawdown is recorded on day 31 it’s printed, price hits target the next month and a high is printed. I re-enter on a different asset and the VAR begins to raise reducing any chance of increasing returns in the Darwin. The lag in the VAR risk manager is impossible for me to accommodate effectively using two of my position and swing trading methods.

I am pulling these parts of the strategy from my Darwin WET and have implemented back into it my day trading methods I used earlier in the year. It will be interesting monitoring the VAR over the next 60 days and the Darwin performance.

The limitations of the Darwinex algorithms are very evident when matched with part of my discretionary style. My capital capacity will likely plummet but the performance will increase for small scale trading.

As for how Darwinex interpret my trading, let us see! I’ll give this project another 9 months before I make a decision on the merits of time spent at this.

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