I was watching a video that @ignacio sent me. Here is the YouTube-link Check 30:50
I think I might go over the first few minutes again before I'm certain I get it. But there is something that worried the bleep out of me from the start, and what a surprise, at the end someone asked the question. This is really important for me as a ultra rookie here at Darwinex to know.
In the video it was said that the Darwinex algorithm 1) limits the risk of an investor to max 20% in a month and 2) trades of investors might be closed prematurely to limit their risks. I'm not sure what is worse, me figuring this out now, or the fact that those 2 things are considered normal.
Let's get into a real live trading scenario I was thinking of.
With topping up / pyramiding technique it is possible to make returns of 100-200% in one trade (with several top up trades). This is actually something I am very good at. But like the presentor in the video states, there is a high probability that trades will not be copied to investors, or with lower risk. This could mess up an investors account. pyramiding with increased lotsizes can only be done properly if the order of the stacked positions with each its own lotsize is executed without any change. But Darwinex would actually change this making the strategy utter useless for copying. As in the video is stated "A method of increasing position size by using unrealized profits from succesful trades to increase margin." If you truly understand how this pyramiding works, you will realize the Darwinex algorithm will mess up such trading strategy. Anyhow, it was my intention to trade manually in the future with such strategy after the automated accounts would have gained enough traction. That plan sure goes down the drain right now.
I found the answer to my own question in the video, but I am wondering whether there is anyone out there who finds this very worrysome as well. And sure I'm curious about who had asked that question in the old webinar. I want to know who that clever guy is seriously...
Let's also discuss fact # 2. Darwinex closing out trades of investors prematurely.
A good trader might have a bad day with some unusual extra DD and open one bigger than usual position to recover. To my understanding Darwinex might close out that trade prematurely due to unusual / or just big exposure. The trader might be recovering nicely while the investor ends up in a loss.
I'm quite certain that those issues must have been raised before and dealt with in-depth. However, please don't expect me to go through the 1500 video's on YouTube or the entire forum to see what the current state of these topics are. I sure would appreciate it if someone would point me to the latest forum section(s) on these topics.
At this stage with the information I had so far my position/view on Darwinex is that the protective mechanisms should be completely ditched including the premature closing of investor trades.
feel free to throw in you point of view, ...