Hello traders and members of the community.
Today is the first day of February, so it’s time to talk about our previous month of trading.
You can watch the video here: Darwinex Account - Review of Trading Month January 2020
I start to have a few questions about my Darwin, so I will first go quickly through the analysis of what happened in January and then I will answer some of the questions.
Before starting, I would like to thank all the people who decided to invest in my Darwin and all the people who showed interest (and respect) in this project. Your trust is the most appreciated reward for what I’m doing here on Darwinex.
January has been another good month, with a return of +3.12% and an overall return (since October 2019) of +12.00%.
If we analyze the candlestick chart of my Darwin, for the month of January, we can appreciate the stability of the system:
Return of 3.12%, with a drawdown in the past month that has been -1.68%. No major swings, only 2 “big” red candles during a sudden spike in the first half of January and another “big” red candle on the 24th of January, due to a news that moved the price fast against our trade.
This last candle is the biggest loss we had in January, in a time frame of 4 hours. We are talking about -1.14% as our major downswing, so, regarding the risk and the return, I can say that I am pretty satisfied and happy about the behavior of the system for the month of January.
Darwinex attributes (related to investors)
In the past months, I have expressed several times my concern about Darwinex factors that could affect investors. In particular, I mentioned VaR and Divergence.
I have studied a lot, trying to be active in the community, watching the new amazing videos in English on Darwinex’ YouTube channel. I have also sent several emails to Darwinex support to ask for their help to monitor if everything is ok for investors of my Darwin (I must be the most annoying client for them )
I believe that everything is under control, but I want to spend a few words about divergence.
You can see that monthly divergence increased to -0.51%, that is not something I would like to see.
This increment is mainly due to the activity in the last part of the month.
As you know, my system is based on GBP/USD. At the end of the month of January, we had the interest rate decision (on the 30th of January) and the Brexit day (on the 31st of January).
In particular, divergence increased dramatically with 2 positions I had on the 30th of January.
The first position hit the stop loss, but the stop loss for investors was executed 13.2 pips far from the real level (that worked for my personal account), resulting in a higher than expected loss.
The second position, was a stop entry order right were I had the stop loss for the previous position. Same story, this position was executed with an entry price that was 13.2 pips far from the real level, that, once again, worked for my personal account.
At the end, I closed that position with a profit of 163 pips, that has been a profit of 149.8 pips for my investors.
These two positions explain the increment of divergence that we had in January.
Overall, I don’t think that this one time episode is a symptom of a problem for my Darwin, but I will keep monitoring the situation in the following months, even thanks to the help and support of the Darwinex community and staff.
I would like to analyze some other points, but I think that I can do it through two good questions I received in the past month.
Good question and I would like to post a screenshot of my VaR so we can check what we are talking about:
Let’s exclude the kind of cloud that I had till the end of November, since it was the effect of the youth of my Darwin
Recently, my VaR is going down, am I really decreasing the risk with my personal account? The answer is NO.
I believe that the VaR is going temporarily down due to 3 reasons:
The calculation is made on 45 active trading days. The VaR calculation left the month of October 2019 (73 trades) to welcome the month of January 2020 (27 trades). Less trades means less volume and less risk exposure, according to the VaR calculation. Risk per trade for my system is calculated in the same way and there have been no changes in it;
As mentioned in previous posts, I traded last period of December 2019 with a lower volume. This contributed to push the VaR down;
We had an impressive positive streak in December 2019. The risk calculator for my system tends to slightly decrease the risk per position during exceptional streaks, whether they are positive or negative streaks.
So, my final answer is: no, I didn’d decrease my risk and I’m not planning to do it
This is a question that I’ve been waiting for a long time, so thank you
We need to separate expectations from guarantee.
The system has been back-tested since 2013. For every single year, it gave a good profit.
In 2019, I have applied the system with my personal account and it has been another great year. Some students of my courses applied it and they had a great year.
I have applied it here on Darwinex since the second half of October 2019, and we are having good results.
Do I have a positive expectation based on real facts? Yes.
Can I guarantee that the system will be profitable in the future? Absolutely not.
I am a trader, not a magician. I cannot guarantee for the future.
I want to take advantage of this question to say something. I cannot promise to have a positive return in the future, I believe no one can.
My promise is that I will keep trading responsibly, keeping the risk low and without giving you swings of -10% in a single day or -20% in a single week. This allows you to have peace in your mind and evaluate whether or not to hold your investment in my Darwin on a weekly basis, without suffering major losses due to irresponsible risk management.
This is my analysis of the Darwin IRY for the month of January 2020.
As usual, if you have any question, feedback or criticism, you’re welcome to post it here in the thread for my Darwin.
I always try to reply at my best (unless your comments are about unwanted challenges )
Enjoy the weekend and enjoy next trading month!