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NemesisCraze Live Portfolio

Instead I look to numbers and I call it overfitting.
Overfitting doesn’t affect only backtests but also live performance.
To avoid overfitting is mandatory to have realistic expectations.
Something that worked too well in 2017 won’t work at all in 2018.
As investors we need something that works every year.

Would you invest a darwin with one year of trackrecord if the manager were another? :wink:

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Yes, not all of them seem great great great at a first sight. But when they are put together, they seem to work fine. And anyway I’d need more than 8 darwins… I don’t want a very small portfolio. Actually I’d like to increase a bit the number of darwins to something like 20. With 20 really good darwins… ahh… that would be much more peace of mind.

Almost all the darwins in my new portfolio has >2Y of trading. So I’d need to wait some more time before including NUN :wink:

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The best darwins are the ones provided by investors. :wink:
If you are are a scammer or a trackrecord farmer you cannot “waste” money investing, you need it to run the farm, to continuously open new accounts to replace the burrned ones or to partecipate to every social trading platform in the world to squeeze money from noobs.

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Yesterday I agreed with you, with a twisted feeling, but today, I have to say: „Yes! “.
I don´t get the concept of the “> X years”, or someone once said “I will invest, when your EX is >8”. I don´t think, that time adds value to significance, by definition.
I had to deal with job applicants in a former life and to some I could say Yes or No, after two minutes, with some I had to go through extensive talks and call-backs. So I could imagine, to buy a Darwin above a threshold of 4-6 month, when the strategy is clearly visible to me. Thinking of the new Darwins in Nemesis` portfolio, there are some I don´t understand and I wouldn´t buy them, if they show 3, 4, 5 or 10 years of positive performance.
Plus, we talked about, how some strategies are favored by certain market environments. Also here, time by itself is irrelevant, especially, as I would say, that market phases last 1-5 years. One would have to wait, till a change in market behavior is measurable and look how a Darwin copes with that.
I am often confronted with trades that seem to have a quite possible downside, but a big upside, or other more complex situations. For example, a trade, that broke an important resistance, where a big up move is likely, but a pullback too. I take this trade, but with a smaller size. In other words: I scale my position size, according to my conviction.
Not meant to advertise my really outstanding Darwin again, but to help portfolio managers to develop more adaptive criteria.

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A long trackrecord does not mean that the strategy is better but proves that the trader is consistent and authentic.
Maybe a trader with 6 months of trackrecord is better than one with 6 years but here we have to avoid scams and lucky stuff and time is the best parameter.

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This is exacly the point , they say a market cycle is 4 years so a really complete trackrecord should be 4 years, to prove that the trader and the strategy can beat every market condition.
My filter, that includes 2 years in darwinex, returns me 20 darwins.
If I raise to 4 years I should invest only NTI ERQ an JMC ( and ERQ is full).
I am happy with 2 years because I trust the other contitions and on Darwinex I can analyze the evolution of scores and the trading journal.
With just return and drawdown like on many other sites I would invest only with 3 or 4 years.

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On a sidenote what do you think of JMC? Do you think that lately (1-2 months) its strategy is different than before? That makes me hesitant to invest somewhat.

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Yes it is different, now it is only eurusd and this is the reason why divergence is better.
This is a good way to adapt.
The style is the same and the trader is the same, so 4 years are 4 years…
Mine aren’t just words, I am investing JMC.
I would like more communicativity from @TitanTrader or @TitanEUR but perfection does not belong to this world… :slight_smile:

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Well said. 4 years is… 4 years

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Sorry for your losses.

I also have lost a lot of money investing in darwins, and I have been thinking about the fundamental motives of the systemic losses of darwins profolios.
Investing in darwins is very different from investing in other classic instruments that are often compared to darwins, such as ETFs, Investment Funds or Hedge Funds:

  • The problem with classic investment: uncertainty about the future behaviour of the market
  • The classic solution: diversification in several markets
  • The problem with investing in darwins: market uncertainty + uncertainty about the trader
  • The solution: diversify into several darwins? As you have said almost all those who do profolios, it does not work.

The problem is that we don’t know if the darwins are really uncorrelated.
With other instruments (ETFs, Futures,…) diversification works well because the long-term correlation between them is well known.

The main problem of a profolio of darwins is therefore that the correlation between them is unknown + the uncertainty about the trader (is he professional?, does he invest in his darwin?, education?, objectives of his trading?, investment style?, recent mental illnesses :slight_smile: ?..)
Really, we only have the equity curve to make our investment decisions.

Despite this, I still think that investing in darwins makes sense to diversify from the rest of the investments.

However I believe that Darwinex could create a better instrument for investors: the Superdarwin, which I will describe in another post :slight_smile:

[edit] Here it is: Superdarwin for passive investors, or how to make darwins more invertible

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After one month, the results are not good, but neither very bad. The portfolio loses are mainly because 2 or 3 darwins, but I think that the others did good. I’ll think that this is just due to randomness. Let’s see what happen next :slight_smile:

It is really true that a darwin with a big DD moves a whole portfolio down.

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Still slightly down. Still early, but the portfolio is working so-so since inception. Not nice to lose money but I’ll sit in my hands.

I’m tempted to leave MNW but it is almost flat after the trading style change, I’ll wait a bit more to see what happens…

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May be I’m acting like a noob selling low, but I think that a 35% DD in my account assigned to this darwin is too much for me.

I’ve sold EZN.

The factors that lead to this are also affected by:

  • Trader’s equity in the strategy is around $500-600. Although he stated that he’s invested with > 10k, I don’t like anyway to see so few $$ in the darwin itself. I think I remember a thread here where someone (I don’t remember who) did an analysis and the winner traders in Darwinex usually had > 10k in the darwin. At the time I bought, the darwin had around 1k equity. The next darwin with so less money in the portfolio is > 3k. I think I didn’t took that into account and I was blinded (again, damn) with the returns/risk

  • I honestly think that the strategy has lost its edge. In the same time period, some of the other darwins in the portfolio did good, some other did bad, but the next bigger DD in the other darwins, since portfolio inception, is a 10%. This one is the only big outlier.

I really desire all the best to @RafwinSistemas, don’t despair and continue working to fix the darwin!

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After this lesson, may be I’ll implement a 30% maximum DD SL in darwins. I’m not sure about this yet, but all the other darwins in the portfolio has had a maximum of 25% DD, so a 30% could be somehow a safety net. Or may be I could do the SL at 35%, like with this one. I don’t know, I’ll think about it.

EDIT: The average DD in the portfolio at this moment is something around 19%. Also:

So it seems that a Stop Loss in a 30%-31% DD is reasonable.

EDIT2: After taking again a look to the DUNN Capital pdf posted in the Realistic Expectations thread, I realize that intra-yearly sometimes the DD is bigger than a 30%. So the same may have happen to EZN. May be I was too fast selling, who knows.

It seems that I’ll need to wait some months for some interesting darwin to build trackrecord. In the meantime, I’ll allocate the money from the EZN sell to NTI. It will break a little the balance (all the portfolio was equal-weighted) but as I’ll have to wait months, I don’t want to have money parked.

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I think shit has started to hit the fan.
Delayed darwinization is a sign of trackrecord farming.

If you are honest there is no point waiting, you create the darwin ASAP to monitor the behaviour of the risk manager.
If you delay you are doing some kind of hidden hindsight selection.

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Hugggggghh :pensive: I didn’t think about that in that way, but it seems logical, now that you say it. I didn’t want to think that a Darwinex employee could be a trackrecord farmer.

Lots of thanks for pointing to this. I’m not comfortable anymore with MNW…

Sold MNW. (again, at a loss. Will I be able someday to sell at a profit??)

Where is it written that the trader is a Darwinex employee?

Speaking about Darwinex guys… we have nice entry on ULI !
Even if MNW were an employee, we can invest the founder ! :smile_cat:

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We talked about that some time ago. May be I misunderstood you, though:

May be that “worked on Darwinex” you just meant that he was working, trading without any darwin. I thought that you meant that he was a Darwinex employee, sorry if that wasn’t the case, I just misunderstood then!

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Yes by “working on Darwinex” I was meaning trading here and not on another broker.

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Bought ERQ.

The portfolio is now slightly unbalanced but it is fine I think:

  • Money from the EZN sell was added to NTI allocation
  • Money from the MNW sell was fully allocated to ERQ
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