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[Podcast] [#8] How DARWIN risk is managed

Hi Community,
Here comes the 8th episode of our series “Trader Nation”!


We start explaining why VaR (Value at Risk) is a proper measure of risk. With 10% monthly VaR at 95% confidence, investors can go to a desert island without Internet next month, knowing that with 95% probability they’ll do better than -10% and with 5% probability they’ll do worse than -10%.

So, whilst DARWIN investors are in the desert island:

  • The trader will have no incentive to change his risk
  • He gets no cut in commissions
  • He only earns on success
  • He’ll ruin his score by changing his game
  • Darwinex will control DARWIN leverage so that as DARWIN investors know those are the odds
  • Apples to apples consistent with that DARWIN’s past
  • Apples to apples comparable to past behaviour by every DARWIN…

Otherwise, it’s all a noisy haystack that smart investors won’t approach.

And the way is to build up our stack from:

  • A trade -> trade level risk
  • A position -> unit measure or risk
  • A strategy -> proper measure of risk

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