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Obsolete Darwin vs new darwin

Good day, i have money invested in this darwin https://www.darwinex.com/darwin/THA?version=4. suddenly today i noticed the yellow warning that says that this darwin is obsolete and i should invest in the new version. I did read what is the main difference between new darwins and old darwins and if i’m not mistaken is basically drawdown management, but how this drawdown is limited in the new version? it’s just limited by opening smaller trades in the receiver’s account, or there’s some kind of gradual stop loss too once the drawdown nears 10%?

I could switch to the new darwin and adapt my leverage to the new one, but i’d like to follow more closely as i can the original strategy because i trust more the trader that the platform and i’m not yet convinced the platform can take better decisions than the trader regarding the trader’s strategy, besides, the old darwin has also a better return/risk ratio, so why i should be incentivized exactly to sell the old darwin and buy the new one?

In case i decide to remain with the old darwin, it will stay online indefinitely or at some point it will be deactivated?

Kind regards

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If you have a leveraged portfolio, there is no significant change in the trades. Your investment amount will now run at leverage x3 with target VaR 6.5 which is about the same as x2 target VaR 10. Just multiply it.

If you run your portfolio without leverage, you’re right:

… and nothing more on the trading side.

The commision fees you pay on the trades of your investment in the new Darwin are reduced by 60%, I don’t know whether there is a difference between the old and the new Darwin. Maybe @bianka could find out this.

You will find a nice difference in recalculation of the past of divergence. As this Darwin was famous for its divergence


it looks now much more investor friendly:

as the difference resulting from divergence is cut between the Darwin’s and the investor’s performance from 196 % to 77 %.

The first investors came in beginning of February 2017, where the new Darwin shows a divergence of more than 10 %, on the old version it is more than 22%. I don’t know how that was calculated if there are no investors, maybe @bianka knows.

You cannot follow the trader in a 1:1 relation as the trader leverages his trading account with a VaR of currently less than 3. That is included in the Darwin’s trades and performance.

What would irritate me more than the return/risk ratio, is the fact that with double leverage the figure for investors including divergence shows a profit of 537% * 2 = 1.074 %, while the new figure for triple leverage shows 302% * 3 = 906%.

The new Darwins performance multiplied by leverage is also significantly cut against the performance of the old version, and I don’t have an explanation for that. I see the same on other Darwins comparing against version 4, but not so extreme. I would expect the opposite as the trading fees should be reduced by 60 % for the Darwin’s trades.
Maybe somebody else has an explanation knows more about it.

thanks for explanation. indeed, it makes sense that if trading fees and divergence are reduced performance should be better, hopefully someone can reply

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Welcome back to the forum @FZLE!

Darwinex manages risk, not drawdown. Please read more here to know the difference between the two:

The difference in terms of risk between old and new DARWINs is the new DARWIN is less risky. In neither DARWIN did or will Darwinex set stop losses for you.

The 6.5% VaR DARWINs allow for more flexibility to manage the risk of DARWIN investments. Otherwise they are the same. It you’d like to maintain the same risk level with the new DARWIN as with the old one, you just have to invest more using leverage.

While we haven’t set a deadline shut down 10% VaR DARWINs, you won’t be able to allocate new capital to them. We’ll stop operating them as soon as all customers have switched their portfolios to the new 6.5% VaR DARWINs.

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thanks for explanation. but if trading fees and divergence are reduced, performance should be better, so why like IlIlIlIlI noted performance of updated darwins is worse in terms of returns?

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I just calculated the performance of a leveraged portfolio position and cannot understand why it is shown so much worse with the new Darwin.

Sorry, haven’t seen this.

This is not a correct way to calculate returns with leverage as it doesn’t account for compounding. Neither is the return of the old darwin with double leverage 537% * 2 = 1.074 % nor is the return of the new darwin with triple leverage 302% * 3 = 906%.

To see the effect of reduced commissions and / or management fees on the darwin’s curve, please visit https://coda.io/@darwinex/pivot/impact-charts-41, THA is included in the examples.

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You are right, that it is not the return of the Darwin, it is the calculated return of a leveraged portfolio position of this Darwin for the same deposit including divergence.
That is what an investor would really have got. The Darwin’s return is not found on a portfolio.

If I have 1,000 EUR deposit, with double leverage I can invest 2,000 Euro. Making 537% with this investment with the old Darwin gives 10,074 Euro equity, which is 1,074 % of my deposit. Correct?

If I have 1,000 EUR deposit, with 3x leverage I can invest 3,000 Euro. Making 302% with this investment with the new Darwin gives 9,060 Euro equity, which is 906 % of my deposit. Also correct?

@bianka If not, what is wrong?

I don’t talk about the provider where divergence is not regarded, I look at the investor side and the published performance figures including divergence.

If I missed something in my calculation, can you help and correct it?

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You also have to consider that 6.5*3 is not 20 but 19.5, over many years the difference can be considerable, it also gets compounded.

Additionally, VaR is a target and, since 2020, a maximum. Actual DARWIN VaR can be different.

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