Today I have received an email indicating that my Darwin RWU could not participate in DarwiniA since It has a correlation of 80% with PYW.
Eventhough it doesn't worry me since I was not getting any prize, on the other hand it worries me since it could happen to get out of this contest.
Lets compare both Darwin:
1. RWU trades just 1 trade in EURUSD
2. PYW trade 13 operations in GBPUSD and 2 trades in EURUSD.
Looking at the imagen, it says Darwins don't trade the same assets and there are not similar trades.
Now this is my consideration... Does it makes any sense that one Darwin annuls the other one in DarwiniA considering that they don't trade the same assets and there are not similar trades?
Looking at the picture, it is obvious there is a correlation in Darwins in the last month ( I am not goint to put that in doubt that), but that is a good information for investors who whant to do a portfolio with descorrelated Darwins.
Regarding DarwiniA, I think one Darwin should be discarded to participate in DarwiniA when trades are similar with other Darwin, not when the Darwin behaviour is similar, since it can happen in many cases with completely different strategies.
Since DarwiniA is a prize, it should penalize traders that copy from each others, to discard for example similar systems working in Darwinex with different users, but when Trades are different, one Darwin should not cancel the other.
If fact, I really think that, to discard Darwins:
1. Darwinex should look at correlation between strategies, not Darwins
2. Darwinex should analyze what assets trades a trader and the other one.
Otherwise, it could happen this situation.
Imagine one Darwin just trade EURUSD and the other one GBPJPY. Strategies completely different, in different assets, and with no relationship between them. Looking at the curves, it is obvious they will have a correlation higher than 80%.
Does it makes any sense one cancels the other in DarwiniA? I think completely NO
To Sum up:
1. Perfect to indicate correlation to investors in order to do a good portfolio
2. Darwiniex should consider other type of correlation in order to cancel one Darwin in DarwiniA, based on the strategy and not Darwin, and considering what assets are trade and the timing of those trades.
It should penalize "smart traders" who try to cheat in DarwiniA with similar strategies traded in Darwinex, not penalize Traders with a high correlation with other Trader just by chance!!
Regards, and Happy New Year!!