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Optimized Demo portfolio

As a passionated algo programmer (mostly EAs) I like a structured process also to build a portfolio.

  1. Build a filter to select Darwins
  2. Create a backtest with this filter which is very easy and look at result for 1 year
  3. Run the optimization service presented here: Portfolio Optimization service
  4. Check whether backtest for 1 year is improved by the optimization service
  5. put the results to the demo portfolio

A) My current filter - please build and use your own:

B) Backtest:

C) Run the optimization service and think “thank you” to @ManFromGlad

D) Check backtest result by unchecking the removed Darwins, it should be better now

E) Build demo portfolio with the allocation calculated by the optimization service

Remarks
Filter results are not always reliable during the weekend as far as I watched it. And thanks to @Tomcat for the idea of using the LA attribute.

I add a stop on the max. DD + 1% of the filter based on the visible ATH of the chart as a risk reduction because the Darwin will not appear in the filter for the next 2 years.

The portfolio should be maintained once every month only.

Monthly maintenance:
i) If a Darwin disappears from the filter, it will be removed only on the monthly maintenance day.
ii) The optimization will be used and the new allocations will be entered:
iii) As I run the portfolio with double leverage, all winners will be sold and bought back with the new allocation to get the full advantage of the double leverage.
iv) The allocation of losers will be maintained by selling or buying the difference.
v) Maintain the stop order and rise the stop level for the winners if required.

If I will publish an own Darwin anytime, it will be added to the portfolio additionally for comparision with the minimum amount as long as it is not accepted by the optimization service with a higher allocation.

This post should encourage you to test your own ideas this way. What I described could easily be done in less than one hour per month and without deeper due diligence as I am convinced that a new investor does not really understand all what Darwinex does, maybe he has an impression which must be worked out by his own experience.

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Return last month >1 …
In this way you will always buy after a profit and sell after a loss, if you rotate every month it will be a continuous loser.

The backtest is not representative beacause it is not “mantained once every moth”.

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We’ll see, you might be right.
This is mainly an idea starting the process, maybe I add a rule not to sell if this is the only crteria not filled.

Most Darwins have a longer period than one month when they are successful, and I hold it as an entry criteria.

IMO the risk is lower to buy a Darwin on an ATH than to buy a falling one.

I played with several filters setting them on the demo portfolio and most ran into losses for weeks.

I would prefer to have 5 - 10 Darwins in the result of the optimization service but there are not enough at the moment. The 3rd quarter is a little more difficult than the first two for most traders.

The portfolio was built at 12:00 GMT and shows small profit until now:

I am afraid you filtered to much.It is better to filter only for the most crucial things and then you will have to get your hands dirty and inspect the engine of every darwin, to select those that you find the most robust or healthy.They should be of approx.same quality so that your portfolio gives you an insurance if something happens to otherwise really good darwin.Common sense is telling me that if Darwinex labs didn’t find winning combination of filters for either their darwins or D-score composition,than this is probably not the way.
Just filter out migrated stuff ,because it is nonreliable data for analysis in more than 50% cases.I think at this stage of Darwinex platform,you could go with 500 days in Darwinex.Than put more modest Return criteria like 30% in 2years and Modest La 5.
LA present number is just present stuff,it is crucial to study graph of La during all life of darwin.
Also length of verifiable track-record.It is not the same if darwin made 40%in 2years or in 14 months.Longer trackrecord is probably stronger with several DD well managed.
DD statistics were false,I don’t know if they fixed this.You have to check manually on candlestick graph all DD.You have to see how darwin got out of his DD.You have to study his trading journal,La graph,Excursions…
You have to decide what trading method is OK for you.Do you trust algo trader that he will not simply let his algo run darwin in straight line down or will he react…Are you ok with grids,averaging down…Are you comfortable with darwin being all the time in the market,even during weekends?Is it ok if he trades only one and which asset or he has many different positions?Do you like scalpers?Night scalpers?News traders?
It is a lot of work.Darwinex tried to help with composite D-Score and doesn’t seem to work for time being.It is young platform and with time it will get easier,more good traders,longer verifiable trackrecords,better D-score,more posters in this forum…Yes,check everything about your darwins in this forum,ask if you don’t find what you are looking for.Maybe you can check directly with the guy behind darwin…Just few ideas.

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I will regard some more tolerance as you described in the September update.

For this demo portfolio I will not do a deeper due dilligence on the Darwins selected. I want to manage it with low effort (less than 1 hour per month), but it is not made for copying by anybody to his real portfolio.

Your backtest has a stagnation of several months and has the advantage of being optimized with hindsight, how can you pretend live results to be be better?

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I didn’t expect positive results. All backtests are bashing the trader what he could have done better in the past and have a low value for the future, if any.

What I wanted was to find an easy method for newbies who cannot understand the whole Darwinex stuff completely from the beginning. It should work without a deep due dilligence - which cannot be worth too much if you don’t know much about the attributes.
And it should work better by using the tools Darwinex offers than looking only on the current profit.

Another point for this method would be to find a point when it is time to sell, regardless whether with profit or losses. I think that is the most important point for investors and traders to have an easy and clear rule when to say bye to the investment or trade. But I doubt that a buy & hold investor like you could help with this. :slight_smile:

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And what is the point to give a losing “easy” approach to noobs?

I think it makes more sense to find a winning portfolio , for you for me for everyone… :smiley:

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Winning portfolios are a secret and not published here, as fas as I understand this forum. :upside_down_face:

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If it were so those winners would share only the chart without composition or filters, just for a bit of glory.
They simply don’t exist, maybe a lucky portfolio with 3 months of trackrecord…

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like all the portfolio stuff published here as promotion for the own Darwin for some weeks and never read about them again when the direction turned

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You are right but I prefer 5 guys that trust something and share it than 500 than neither do that.

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This is a simple idea for noobs that has very good chances to work.
Not so different from my demo.

By the wey this concept would never have worked one year ago or before.
It could work today with better visible darwins and a bit smarter crowd of investors.

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Thanks for the links.
Looks like both portfolios have more than 50% the same Darwins.
Do you use about the same criteria or is that result incidently?

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Almost the same, it is top 10 for AUM but I rotate it every month and mine is equally weighted.
As you can see some months there is no change to the portfolio and this is s big advantage, every change is a realized loss.

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Yes,because of Divergence problems when place gets crowded.

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September Update

As the portfolio showed nice performance for August, it got lost in the first week of September and recovered during the heavy trading in the last 2 days.

Now I’m very curious whether it can show pofit again at the end of this month.

Against my description above I sold all positions (also the loosers) and bought the new Darwins.

The new setup is built as followed:

  1. filter selection
    I changed the criteria to get more tolerance at adviced by @Tomcat. I kept more restrictions in the criteria when there was no difference in the result at the moment I changed the filter.

  2. backtest


    SKN is removed from the filter result as it is not published since more than a 350 days.
    My Darwin DIR is added as it is available since beginning of this week. More information about my Darwin DIR will be added soon in this community.

  3. Run the Portfolio Optimization service

  4. New Portfolio Setup

The chart of the portfolio shows now the following data:

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October Update

the portfolio suffered in September and wiped out the profit of August.

For the new setup there were no changes made on the filter.

All Darwins have a stop loss at 21% below their all time high which is easy to find out from the chart if the candle chart is used…

WAC has to be removed again as the bug with the ‘1 year at Darwinex’ criteria is not solved yet.

My Darwin DIR is incuded with the minimum amount as it was removed by the optimization service.

Backtest

Portfolio Optimization service

New portfolio setup for October:

Chart:

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This is the last screenshot of my old optimized demo portfolio …

… before I reset it because I’m not pleased with it’s performance.
The setup will be changed and a new portfolio will come very soon.

And this is the new portfolio setup after resetting the demo portfolio:

  1. I changed my filter criteria:

  2. I selected the top 10 of this filter sorted by investor capital. Then I put them in the backtester and removed the ones who didn’t show significant performance during the last 12 months.

  3. I put the remaining ones in the Portfolio Optimization service which also eliminated some more.

  4. I put them in my demo portfolio with a 20% stop loss under their all time high. And here it is just after buying the positions.

  5. Looks like a typical real newbie portfolio :joy:

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