Experience Investable Attribute

[Progressivex]

I understand you, but I still think a trader with an average of 217 operations in just over two months, he knows that in a few months, his "experience" grows faster.

I explain:

Darwinia is a competition / race in which the experience is highly valued, I understand then that a trader whose speed is to increase your points higher than that of traders in the same situation as me, try that this situation does not change. This is logical, but do not think it's fair.

Within two years you will have a 10 on experience and you know it. And you know that other traders like me will have a 5. By this I mean that you defend the system does not change but this is not fair. As traders monitor the market probably the same or similar time traders like you. And I insist, not to enter the market is also part of the experience.

Thank you.

regards

[Progressivex]

Moreover, as an investor I prefer a trader who is able to be profitable and have my money at risk the shortest possible time.

I think that if it is impossible to appreciate it, but I want to say this clearly.

Someone thinks otherwise?

[CoolTrades]

Yes I agree with you when you write "not to enter the market is also part of the experience.", realy.
But as an extreme, if a trader trades 1 or 2 times in 2 years, can you validate that?
The true question is: How many trades must be taken in consideration to validate statistics? I read, and experiment that less than 200/300 (in a minimum of time) is a minimum...
But it is my opinion and i understand you point of view (and perhaps frustration).

Best regards.

[Progressivex]

I'm glad we understand each other.

And I understand that 200 trades is the minimum to have a reasonable number.

Now I want to ask you two questions:

We have two traders:

1. This trader makes 100 trades in one hour (we all know that this is possible)

2. This trader makes 50 trades in a year and decides not to enter the market 50 times (which makes properly, as if he had made those 50 trades had lost money)

My questions are:

a) in which of the two you invest?

b) still you think that the experience should only measure the number of trades?

What I'm trying to say is that to adjust to the reality, which "darwinex" tries to do very well: is that the reality of the experience depends not only on the number of trades, but also depends on the months that one is constant making trades. That is, the experience depends on: number and time.

[CoolTrades]

I will prefer nr 2
The time is also very important, as I wrote ..." (in a minimum of time)" in my previous post.
And I absolutly agree with your last sentence: "That is, the experience depends on: number and time."

...If I can extrapolate your example (the 2 traders make the same profits), my answer might be different. I invest in the first, and I go after an hour to invest elsewhere, instead of waiting a year ...
But I don't know the trade results before, and things are often not "elsewhere equivalent".

Thanks.

[KlondikeFX]

What I'm trying to say is that to adjust to the reality, which "darwinex" tries to do very well: is that the reality of the experience depends not only on the number of trades, but also depends on the months that one is constant making trades. That is, the experience depends on: number and time.

If I am not totally wrong, this is what Darwinex is already doing. If a trader is trading 100 times an hour he is not getting the same experience grade as someone who has traded 100 times over a couple of weeks. And rightfully so.

However, it is impossible to evaluate "folds" in trading. So even if you have taken the 50 trades over a timespan of 4 years it is still only 50 trades and lacking statistical significance.
By not taking trades in 4 years but constantly watching the market you are undoubtedly gaining experience as a trader but this is not the Darwinex experience that is used to evaluate a strategy.
I am sure though that investors will will additionaly look at how long an account is already being traded. At least I do.

[Progressivex]

Darwinex already does this, but I propose is that is more important at the time that it currently have

[Progressivex]

by the way, not only do my proposition for investors to see me, but I make especially for participation in Darwinia

[CavaliereVerde]

Just moved this interesting topic to the right section.
With reloaded Experience has more weight than before, because there are no more levels.
While before almost every Darwin was created with a score of 20, now it isn't so anymore.
There will be less talent-scouting but also less "mass production" of Darwins.

[TaoInvestments]

Category 1 - Performance
Ex , Pf

I do agree with the experience in category 1 but I'd be interested to hear your views on how this should be calculated.

How do you assess the decision not to be in the market.

Example:

Trader A has a 2 years track record and only taken 100 trades.

Trader B has a 3 month track record but has taken 2000 trades.

Trader B would score higher in experience but would have sat through less market cycles. Whereas Trader A would get penalised for not taking as many trades even though not taking a trade is also a trading decision.

[CavaliereVerde]

@TaoInvestments
I also agree with you!
Experience is the statistical significance of the sample of trades.

You are right about decisions "not to trade", but trading is a metaphore of life.
Every day we make a lot of decisions not to do something, and these decisions may be very important.
The problem is that we can be rated only on what we do.

[OGFX]

Hi, first off, just like to thank you for all the well informed posts (sorry about the like notifications!).

My Darwin OGL is going live tomorrow, it took 3 months to gain the required experience. When reloaded launched, my experience dropped significantly and seemed to begin accruing at a slower pace. I think experience has not only been given more weight, but also become more difficult to acquire - can anyone confirm?

[CavaliereVerde]

I like to be liked!

No the experience algo is still the same, you need 12 D-periods to acheive a score of 10.
And a D-period equals 1 trading month for an average system.
Experience now weighs more because thare are other things that weighs less (timing and consistency).
Before almost everyone started with a DScore of 20.

I think more time is required for the IPO beacuse of the longer lookback for VaR calculation.

[OGFX]

Ah okay then, so there was an increase in the total experience required for IPO? That would explain why my 'experience required' metric dropped from low 50s to low 40s with the switch.

Good to know experience isn't actually 20% more difficult to acquire!

[bianka]

Though it is correct that Experience of some strategies decreased sporadically when 10% monthly VaR DARWINs were launched, Experience is not more difficult to acquire now than before. Market exposition of all positions is calculated with the same VaR, therefore the rule that "1 D-Period is approximately equivalent to one month (22 market days) of daily trading" keeps valid.

[OGFX]

When I first read this thread I thought the experience attribute was pretty fair, but delving further into the stats of my Darwin OGL, I am starting to question my initial assessment. I'm beginning to think longer term strategies are treated unfairly, yet the attribute is supposed to compare 'apples-to-apples':

" The first is comparing experience apples-to-apples across strategies. A scalping strategy with 5 D-Periods proves the same experience as a swing strategy with 5 D-Periods - despite radically different trading styles. "

After noticing I'd only accrued .57 D-Periods in 3 months and that it would take me on average 123.6 calendar days to accrue a D-Period (a whopping 4 years to reach a 10 in experience!), I thought I'd look into just how active my bot had been since inception:

• OGAlphaEA was launched on March 1, the first trade occurred on March 3.

• Since then, my EA has taken 18 trades.

• The shortest trade was 9 hours and 14 minutes, the two longest trades were 7 calendar days each, and the average trade duration was 4 calendar days.

• If we multiply total trades by average duration, we see that my bot had positions open for a total of 72 calendar days since March 1.

• Since March 1 there has been a total of 99 calendar days.

• Therefore, my EA had positions open 73% of the time (this is likely a little overstated due to occasional trade overlap).

As you can see, my EA was actually quite active during this time, even if we over account for occasional overlap, it is safe to say that I had positions open more often than not. Yet according to Darwinex, in the 99 calendar days since inception, my bot only accrued 12.5 days of trading experience.

Now I don't want the Experience IA to count time when you are not trading, I think we all agree that is impractical at best; but in this case at least, Darwinex is clearly not giving enough credence to times when you are trading. We can argue about whether or not being flat is a measurable trading decision or not, but it is very hard to argue that holding onto a position is not a trading decision worthy of experience:

My two trades that were held for 7 days netted 213 and 198 pips, 7.73% and 7.92%. My shortest trade lost 35 pips, -1.8%. There is a reason we "let our winners run".

I conclude with the assertion that trade duration isn't given enough credence, which makes an unfair playing field for longer term traders. As experience is so important when it comes to D-Score, Darwinia etc, I think this is seriously something that should be looked at and addressed as appropriate. @bianka @ignacio @Vladi

Would love to hear other provider's thoughts and feel free to point out any errors in my logic!

[PetePan15]

I couldn't agree more, and I would assume the guys at Darwinex agree with your reasoning too. But at the end of the day the question is what kind of information the algos are able to translate into risk management. Holding a trade (and yes, staying flat) is an extremely important decision, and the algos do measure it to some extent - but they cannot rate it as "experience", because as @CavaliereVerde pointed out above, what they really need is "statistical significance of the sample".

So I would suggest that, yes, the current experience IA favors intraday & scalping strategies, but it makes a lot of sense from the perspective of risk management, because it serves as a basis for all the other IA's to be assessed with statistical significance as well.

[ignacio]

@OGFX Thanks for your detailed post. No worries, one of our experts will review your reasoning and get back to you.

Best,
Ignacio

[CavaliereVerde]

@OGFX
Percent of time in market is only one component for Ex calculation.

Ex is calculated on exposure but mostly on representative trading decisions .

We could discuss that letting a winner run for one day is a decision, reality is that is difficult to state the real significance of a sample.

[OGFX]

Thanks @ignacio much appreciated, not only is Darwinex the most innovative broker around, the customer service has always been a head above the rest too!

@PetePan15 @CavaliereVerde Thanks guys and I agree completely in that trade numbers / statistical significance should remain primary driver behind experience. More just arguing that duration should be given a little more weight so as to even out the playing field between scalping / intraday / swing / position / trend traders.