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$DWC - A Real Time Sentiment Index & Security

Real-Time Sentiment Analysis today, continues to be an elusive, ever-evolving challenge.

The Challenge: Measuring in real-time, how market participants are presently orientated.

The Solution: DARWIN DWC?

DWC openly addresses the problem of lagged sentiment, and presents Darwinex Traders & Investors with both:

  1. A mean-reverting price series to trade standalone.
  2. An instrument to hedge exposure against during deep, turbulent market movements.

Here’s our latest blog post for more on this:

http://blog.darwinex.com/dwc-real-time-trader-sentiment-security/

We would love to hear your thoughts and ideas below - please do share!

  • The Darwinex Labs Team
12 Likes

How about shorting this? Maybe you could invert the Darwin :wink: DWCi (inverted)

This would be intresting for other Darwins as well hehe.

4 Likes

@DarwinexLabs
I am a bit confused after this last article about DWC.

Is DWC designed and optimized to grow and profit or is it designed to go sideways and be used like an oscillator?

Said in others words: is DWC investable or just tradable ?

3 Likes

Hi guys,

@easyFX - Interesting suggestion. Unfortunately, inverting DWC would result in the effects of spread and commissions impacting DWC negatively.

@CavaliereVerde - Great question :slight_smile:

DWC is not designed for passive investing, but for being a near-perfect hedge during unexpected market events that impact traders badly, particularly loss averse traders who keep too many losing positions open.

DWC can be used as a passive investment inside a DARWIN portfolio, but only to hedge against such events.

But for Darwinex Traders & Investors looking to invest for gain, they would need to trade the DWC like they would any other asset, e.g. EUR/USD, etc.

DWC’s mean-reverting behaviour makes it particularly attractive for range-trading.

To make things a little clearer as regards “DWC replicating the opposite of trader behaviour”:

  1. DWC trades are routed to the market just like every other ordinary DARWIN.

  2. Darwinex does NOT deal against customers.

  3. DWC’s objective is to assist traders/investors with hedging risk during unexpected events (e.g. GBP Flash Crash), but is also a range-trading candidate for those who’d like to trade for gain.

6 Likes

http://blog.darwinex.com/statistical-mean-reversion-tests-darwin-dwc/

Very interesting…

@DarwinexLabs
So what can we expect?
Another darwin running a mean reversion strategy on DWC ?

5 Likes

Hi @CavaliereVerde,

Thank you for your interest! :slight_smile:

The main purposes of the “Mean Reversion Tests on $DWC” blog post were to:

  1. Show Darwinex Traders & Investors a series of statistical tests that explore any mean reverting tendencies in the asset.

  2. To reinforce that the $DWC is a range-bound asset due to the fundamentals behind it (trader collective’s behaviour)

  3. And to shed light on the fact that one could include the $DWC in a portfolio not only for e.g. hedging risk against loss averse DARWINs, but also that trading $DWC Intraday or Intraweek is possible.

We’re actually due to publish another post very soon on how having $DWC in a DARWIN Portfolio can hedge against catastrophic drawdown from DARWINs with low La scores.

While you wait for the post, an interesting exercise would be to:

  1. Click on “All DARWINS” -> SET UP FILTER in the left-hand Reloaded Menu.

  2. Set up a filter with just Loss Aversion (0.0 to 4.0) - or you could e.g. search for any DARWIN you know of that recently took a big hit and also has a low La score.

  3. Proceed to the Correlation tab of the DARWIN, and enter DWC in the text field - see how they compare.

You’ll find that in a majority of cases, it would have made sense to have had DWC in a portfolio with such DARWINs, and proven to be a worthy hedge during significant drawdown periods, e.g. reducing the impact of sudden drops :thumbsup:

More on this in the next blog post!

7 Likes

I just finished to watch the recording of the webinar regarding DWC.
I have a few questions.

  1. is DWC weighted more on more invested DARWINs ?
  2. VAR graph in RS is now less than it was a few month ago… this is resulting in more leveraged position…right? if so… is this intended ?

TIA

2 Likes

What i do not understand is that you explain to us that the current open Trades of DWC is a good meassure of what can happen next (together with Vola and the DWC Quote). // recent Webinar

And now i have to see that this (open trades) is not published anymore? Whats the reasoning behind this? Also hiding the traded pairs.

Other questions, if you say the community is not in balance (not 50/50) to enter with DWC what is the data basis? I mean 50% of traders could be short and long but positions sizes could vary? SO do you use Positions sizes or individual Trader decissions? Or even per Account/Strategy? Do you exclude some of the good traders for the Data? What makes it a bit weird is that DWC makes profit if most traders fail, so you basicly need to be happy to get the data from the bad traders, but you give money back via DarwinIA to good traders, who actually work agaist DWC somehow. So basicly it makes no sense as well to give money back to the bad traders, but i would have more liked a general distribution key, e.g by a commission based rebate for everyone even though it’s not to much, but this would be the only fair payback for the data you get from the traders.

Hi there!

Thanks for your point. :smile:

Regarding DWC hidden assets and open trades, please bear in mind showing these assets and trades could affect traders’ decisions.

DWC position is calculated based, only, on number of strategies showing a decision (long/short in an asset). One strategy = one vote. :wink:
There is no position sizing or investors in it.

Why PFs are paid to top DarwinIA traders? The reason is here (Darwinian Dividends). We chose meritocracy.

5 Likes

Hi Community!

We have been thinking time enough on DWC’s Open Trades information and we have decided to show them.

There is a thin line between showing DWC information and affecting traders’ decisions, and we wanted to make sure we do not trespass it. :grin:

So welcome again Open Trades on DWC’s Underlying Strategy tab!

5 Likes

Just wondering, did you tested also other ways to calculate position(size) for DWC?
Like total number of strategies != real volume. Maybe only 40% are long, but they hold much more Lot?

Or how about very new Darwins/Traders? They are more likely to be wrong maybe? Or very good darwins, with a long track record, might be good to exclude?

Are the assets weigthed by total volume at all?
XAUUSD wasn’t part of DWC right? (since i think i can trade it during the gold gap at night)
Do you want to keep it like it is or do you have plans/ideas or at least are open for improvements?

Sorry for all the questions, just want to understand DWC as much as possible :wink:

Hi @easyFX!!

Thanks for the feedback.

In fact, DWC has gone a long road of research before publishing it.
DWC only uses Forex for now, but we are working on implementing Indices aswell.

I’m sorry we don’t have enough information to reply your other questions.

1 Like

AUM Tumble on DWC!

Source: screenshot on the video 'Why DWC? Leverage Brokernomics via our community sentiment indicator 'posted on January 9, 2018 on Darwinex’s YouTube account

Sorry for the quality of the picture.
AUM: $ 2’861’245.88
Investors: 201

Source: screenshot on the platform this February 15, 2018

AUM: $ 693’744.49
Investors: 120

Evening a slump in investment of 75.75% :face_with_head_bandage: in just over a month!

The question I ask is whether it is a variation of the Darwinex hedge, the primary function of this tool, or a desertion of private investors?

1 Like

2 millions redistributed on investable darwins that deserve that capital.

That should be the mission of Darwinex, providing investable assets, not ranging assets to average down. :wink:

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So you share my opigons that a lot of investors bought blindly DWC without even knowing what it was?

Yet Darwinex specifies that this product is not intended as a long-term investment product.

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No they didnt buy blindly, they were averaging down heavily and knowingly :smiley:
Now there is a relative high and they sold and realized the profit.

IMO they noticed that the range is not so defined and it was a bit more dangerous to hold.

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Yes i think most where surprised how low it dropped, me to a bit. It needed some patience, but finaly i quit with some profit. I will keep trading DWC, always trying to buy low, sell high, if i am wrong i am averanging down. Right now i missed out part of the last run up :confused: Anyway i like it for trading :grin:

2 Likes

The bottom line of my question: do the AUMs shown include the Darwinex broker hedge?

We see that DarwinexLabs are investors, but it’s not very clear if their investment represents the market risk hedge of Darwinex broker?

Maybe an answer from @DarwinexLabs ?

1 Like

Is DWC still performing within its parameters?
Now at 88.68, unfortunately I entered at 101.26 and am suffering a large loss

I didn’t know that DWC was best for trading until recently but there is no point in me selling it now that it is loss for me, hoping for a recovery and some reassurance that it is still within parameters and that the current performance is normal would be good

1 Like

Another month passes and now at 87.40

Is there any hope for dwc?

I think we are at or close to hitting all time lows

I can’t quite work out what has changed in the formula, for 2/3 of its life Dwc has performed around break even apart from the most recent third. Frustrating !

2 Likes