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IDT - BenHardy

Dear Darwinex Community and Investors,

Let me introduce myself and my DARWIN IDT – the “i-DayTrader”.

I’m an experienced full time algo trader working independently for asset management companies. The only social trading platform I use to share my systems is Darwinex. You can find my strategies also on other popular sites but can’t copy my trading from there. The reason for this is simple: No other social trading platform apart from Darwinex really protects a trader’s intellectual property. Furthermore Darwinex offers its unique risk engine that is able to significantly improve almost every strategy’s performance in terms of risk to reward.

IDT (update on 15th of February 2019) is an automated but human controlled strategy running on 6 cross pairs. The basic idea behind the trading system is the assumption that the price mostly is moving in waves, no matter if its overall direction is up or down or sideways. Positions are mostly held over 5 up to 15 days, sometimes shorter or even up to one month. The chosen symbols are preferred because of their low “PnL correlation” regarding the trading logic and because said cross pairs tend to be very “noisy”. This is advantageous for an EA that uses oscillators.
The respective EA has passed different stress tests and was developed with real ticks from Dukascopy over about 15 years.

I invite you all to share your thoughts and ask questions (if any).

Best of luck,
Ben

IMPORTANT UPDATE on 25th of April 2019:

Due to technical problems I unfortunately must stop IDT (again) and solve the issue. Until further notice I recommend to withdraw your investment from this DARWIN. Trading will resume as soon as the respective EA has been fixed (1 - 3 months). Please keep IDT on your watchlist!

P.S. Please note that the original strategy made a small profit since inception in mid of February 2019:

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Fantastic curve, just impeccable, congratulations!!!

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Thanks a lot! I’ll do my best to keep it up - and already work on even better systems for 2019… :slight_smile:

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It’s great to see you around, @BenHardy, welcome!

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IMPORTANT UPDATE:

IDT’s underlying strategy is currently facing big slippage regarding the average difference of “ordered price vs executed price”. This results in a significantly deteriorated performance also for investors. As a temporary workaround I tried to set the maximum amount of investor capital to $ 100k but unfortunately $ 300k is the minimum for said restriction.
So I recommend to invest your money into another DARWIN until I’ve solved the issue. But please keep me on your watchlist and come back here from time to time to check if the problem became obsolete :-)!

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Hello,
I am already invested in your Darwin 2 accounts (Leire and Gaztea)with a signifficant amount of money. Do you recommend to exit it? Are you going to try new things and the strategy will behave differently or should we expect the same performance as in the last 2-3 month? I am very happy with this darwin and i wowuld not like to exit.
Thanks for your feedback!

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Hi Leire,

Thanks a lot for having invested into “IDT”!
The performance of my DARWIN in APR - MAY - JUN was 4.37 % return per month on average which is above the expectancy of about 3.5 %. However at the end of April AUM increased leaping up and unfortunately caused significant slippage from then on. Thus expectancy decreased from 3.5 % to about 2.8 % monthly (on average of course). I’m working on a solution but this may still take some time.
It’s hard to say if selling IDT now is the best option in your specific case. It depends on the alternatives you have…

Best,
Ben

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Thank you Ben, your explanations and care about investors very much appreciated!

I’m glad to give my feedback, since invested on your Darwin IDT on July 6, order executed at requested price and divergence has been almost zero. Even being a relative small time sample (one week only), it looks promising as its performance has been quite resilient and keeping consistently stable on positive territory, given some erratic market on cross pairs you trade.

Cheers,

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Hi Epiphron,

Thanks for your trust! But just to carify: The problem is not the divergence of my DARWIN investors’ execution compared to the execution of the underlying strategy. The real issue is that the underlying strategy itself currently suffers big slippage due to different reasons. So my personal trading as well as my investors’ positions get slipped (very similar).

Best,
Ben

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Hi Ben,

Ok, thank you for the clarification!
So we might extrapolate that without the slippage you mentioned, behaviour would be even more resillient/stable. Anyhow, looking for gradually scalling in on IDT.

Cheers

Hi BenHardy.

I am one of your investors. Looking at the recent performance unfortunatly it seems that you are facing the biggest Drawdawn since the beginning of the Strategy.

Any comment about the situation?

Hi Gazeta,

Thanks for your request!
Of course I’ll make some explanations to IDT’s current situation - I had planned it anyway.

First we must see that the system’s performance was extremely stable till now. On 18th of June the total return since inception amounted to 69.91 % with only 5.11 % of maximum drawdown after 15 months of trading. Of course I wish that IDT’s story would continue exactly like that but actually my (backtest) analysis indicated (even before I started live trading) that this won’t happen in the long run. Instead I have to expect up to 15 % max all-time DD when using VaR95(monthly) = 10 % [a DARWIN’s overall risk by default].
So unfortunately I can’t promise you that the current drawdown will soon be recovered. We can get a new all-time high in two lucky weeks or an ongoing stagnation phase of up to 7 months in total. But what I can tell you is that my strategy has passed a lot of stress tests which proved that IDT will always survive and bring profits on a yearly basis. There’s no “Holy Grail” in trading - as you surely know - so diversification means everything for an investor. But it is also important not to always “buy the high and sell the low”. Those who do so feed the market, it always has been like that. But finally there’s only one person who can and must decide when to “exit” – it’s you.
As already stated, I can’t promise anything but at least confirm that IDT’s strategy was designed with highest professionalism and all statistics indicate that there’s a very big potential of good profits within the next years.

Best,
Ben

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So, is the problem that this Darwin is having during the last weeks the slippage or the strategy?

The strategy itself is not the “problem”. It might look like that because the maximum drawdown till now has recently been exceeded. However the calculated maximum drawdown was/is about 15 % and the expected maximum stagnation up to 7 months [this will happen from time to time] when trading with VaR95(monthly) = 10 % [a DARWIN’s risk by default]. The slippage issue exists independently and is due to limitations of a broker’s liquidity. In case of Darwinex my personal trading account for IDT loses averagely about 1 Pip per trade because of said issue, same for my investors. Darwinex will provide solutions for affected accounts in the near future.

Best,
Ben

IMPORTANT UPDATE:

Please read the modified DARWIN description on top of this thread (major modification of the system).

Best,
Ben

Hi BenHardy.

I am one of your investors. After 1 month of this modification.

Any comment about the situation? Did you solve the divergence problem?

many cheers and happy decisions

Hi normix,

Thanks for your request. Of course I can give an update regarding the current situation:

Overall IDT is running now since almost 19 months (starting on 1st of April 2017) and has reached 57.19 % of gain with a maximum drawdown in the amount of -7.49 % to date. That’s the good news respectively still a nice performance in total. However I must admit that in context of the recent months for most investors it may look like the system has lost its edge. Well, let’s imagine that the drawdown soon reaches even 10 or 15 % (= calculated maximum in theory). In this case almost nobody would be willing to invest even one cent anymore - when seeing an “extremely” dropping growth curve. However if we would take the overall curve then and “copy” it multiple times in succession over a total time period of - let’s say - 5 years, the total performance would still look stable and very attractive.
So the real problem is that a trader needs a long track record to demonstrate that his strategies are really robust and profitable in the long run. Because there are so many traders that are successful over several months or even a few years simply by chance (there’s a high probability that among a few hundred million retail trading accounts worldwide some will show great performances for a longer span even when using a dice) an investor has a rough ride when making his decision where to put his money. So he has only two options:
a) Choosing a product with a convincing (verified) track record over many years.
b) Choosing a trustworthy talented trader/provider with less history.
You - the investor - unfortunately cannot verify the theory and its potential a trading system is based on. Even when getting all backtests, robustness analyses, Monte Carlo simulations etc. you can’t know if the material is faked.
So finally I can only tell you that I’ve developed an investment product to the best of my knowledge and belief with a high probability to be profitable in the long run on a yearly basis. Unfortunately there’ll never be any guarantee that a strategy will work forever, so it’s all about careful development, risk management and diversification.

Best,
Ben

PS: The “divergence issue” is not significant anymore, that’s why you now can’t see any statement here regarding this.

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UPDATE:

Please note that IDT is currently in the process of getting a major update for trading in 2019 and afterwards!
Trading will be continued in mid-February.

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UPDATE [VERY IMPORTANT!]:

Please note that because of IDT’s trading history within the last few months, Darwinex’ risk engine recently calculated an extremely low value for VaR95(monthly). Right now said value is below 1 %. This means that all investors will receive risks per position about 10x as high as IDT’s underlying strategy. Since the updated trading system will be more volatile than before the recent pause, the DARWIN will become disproportionately riskier / more volatile until the risk engine will have learned to “understand” the new strategy. A daily volatility up to 5 % or - in extreme cases - up to 10 % - will temporarily occur within the next 3 months. This concerns wins and losses and there’s nothing I can do to prohibit this: It’s a result of the way Darwinex’ risk engine works when a DARWIN’s underlying strategy and/or risk setting abruptly changes.

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Hi Ben,

Thanks for your contributions!

I’m new to Darwinex, but old in the industry. I get the impression that you are very knowledgeable and fighting to create good returns. Great!

I have an investor question on the subject of Darwinex risk overlay, and I hope you’d be willing to share your thoughts on the subject. As you have experienced yourself, Darwinex risk overlay will adjust the traders own sizing. From the perspective of an outside bystander, this should be a good protective order. However, if the trader is actively and successfully working with sizing of trades depending on his assessment of distribution of possible outcomes, then I assume that Darwinex risk overlay will negate that added edge. If you could share any views on this subject, it would be much appreciated (although question perhaps not directly related to your IDT Darwin)

Kind regards,
Fredrik