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Should only certain brokers pass the track record migration test

Recently, I have asked Darwinex to add servers of a broker from which I wanted to migrate a track record. Darwinex kindly added the servers, but the more I thought about it, the more I realised that the historic track record did not make sense for a number of reasons that are outlined below:

  1. The source broker is a Market Maker. Yes, I know, many people hate MM brokers, but not really the point of this discussion.
  2. The source broker account uses fixed spreads.
  3. The source broker account does not charge commission.
  4. Slippage behavior between the brokers will be different due to very different models of either STP based liquidity or other platform participants.

There are potentially other points to add - but in summary, the strategy that I was about to import would have been traded on very different broker conditions than Darwinex. I say again, this discussion is not about which one is better, but it’s about the fact that they are very different.

Hence my question - should Darwinex allow track record imports from all brokers, or even better, should Darwinex move towards a model where only native Darwinex track records are allowed?

Of course, some will say that it depends on the strategy - and that this is more of any issue where shorter time-frame trading is concerned than say swing trading etc.

Keen to hear your thoughts.

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Is the strategy so broker-sensitive?
Is the average trade 5 pips or 50 pips?

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The average TP is between 5 pips and 15 pips - so there are a number of things mentioned above that could impact the overall performance of the strategy once migrated to another broker (any other broker).

The big thing, and I don’t believe this is only limited to shorter time-frame trades / or trades aiming for fewer pips, is the fact that you do not pay commission on some MM brokers. This itself could make a big different in my opinion as the commission charge model vs spread only vs combination of both could also have implications.

So I agree and as mentioned above, less of an issue depending on the strategy.

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IMO there will be no issues because probably you are migrating to better conditions, so the strategy will perform better on native part.

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By way of example:

https://www.darwinex.com/darwin/FDU.4.24

A pretty good looking strategy that was migrated from another broker to Darwinex - and to be fair, the performance has been consistent since migration. So the question is not whether Darwinex is good for scalpers (I’m sure it’s fine it it’s own right) - the question is how different the results could have been if this strategy ran on a broker with very different commissions etc.

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This is what traders should avoid:
https://www.darwinex.com/darwin/SSS.4.12

… and a smart investor should wait at least a couple of months after a migration, expecially a migration of a wonderful trackrecord… :wink:

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What I would like to know is how an imported strategy from FXCM would look like as they charge their commission through withdrawals.
Just in case this is not considered properly during import that could indeed skew results quite a bit because if the withdrawals are not considered as commission you would be trading with tight spreads and without commissions :astonished:

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And I think this proves my point. The decline in performance could be purely due to a change in broker conditions / commission structure / fix spread vs variable spread.

Also a very good point.

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One idea i would suggest: maybe dont “import” to much experience, if the experience lvl for imported strategies would be capped at e.g 5/10 and then they need to get the rest from trading with “Darwinex Conditions”.

If you go into detail, swing trading strategies could be effected as well, depending on swap charges. Imagine an import from a swap free “islamic” Account. Not sure if it’s possible to “adjust” all the trades to Darwinex conditions or if they even do it??

Anyways i dont see a big problem, it’s up to everyone to invest or avoid into these Darwins, it’s your decision and your own risk.

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Yes some sort of limitation on migrated trackrecords should apply.
And public trackrecord has always much more value that the part before going public.
Once you are public there is no more survivorship bias.
I am sure they will limit the practice of migration in the future but at the beginning it is the only way to present some strategies to sell to investors and populate the environment.

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I have actually proposed a “solution” to this when Uservoice was still up and running - and it was in my opinion a pretty easy concept to implement - but never given much notice I guess.

  1. Migrate account. 2. Trade for another D-Period(s). 3. Activate DARWIN.

I.E - your DARWIN should not be open to investment until step 3 has been completed.

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And additional it should be listed from which broker the account was migrated - the migration date is not enough.

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I’ve just seen something that may relate to this subject and the overall way migrations happen. It could be a coincidence but BMZ has suffered its longest period of DD recently and it seemed like it started basically the exact day it was migrated. It could be a coincidence but it could also be something to do with migration and moving brokers?

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I don’t believe in coincidences… :wink:
I would wait always at least 3 months before investing something migrated.

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@TraderTom
[OT]
What is the consistency of a darwin with 81% activity on the 10th day of the month? :wink:
(both my algos are at 67%)

I fully agree to all discussed here and I wonder, why this topic is not taken under review.

Additional currency pairs or indices not available at Darwinex (Tradeslide) should be eliminated from the track record and not regarded in the trade history. All calculations should be made without these trades. Im my opinion it doesn’t make sense to show the success of trading for example USDRUB or others which you find in the pie chart of a currently famous Darwin coming from another broker.

I fully agree with the suggestion of @TheMarketBank, at least the D-Score calculation should not base on the trade history of another broker to avoid an investor trap.

As long as that is not implemented, at least the pie chart of the asset allocation should be also available as a list so that these impossible results for darwinex can be found easier. Currently it is a puzzle work on the pie chart.

With the passing of time I am starting to think that Darwinex is intentionally leaving some traps. :wink:

Darwinex isn’t hiding anything, it is showing the migrated part.
It is up to a smart provider to come here and explain the migrated part.
And it is up to the investor to ask for those information or avoid investing without a significative native trackrecord.

This is the goal of Darwinex: smart traders AND smart investors.

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That is the point what I mean: that historical stuff should not be migrated at least as long as it is not available for trading at Darwinex. I assume that I would sort it out from my trading like TRK and MXN pairs.

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@Journalist MXN and TRY are available on our MT4 :wink:

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In the old debate of ‘native’ historical versus imported, I recall that in fact, with reloaded, there is nothing native before April 1, 2017 !

There can be enormous differences between a Darwins v. 3.xx and the same Darwin v. 4.xx.

I saw certain Darwins with more gain in v. 4.xx than in v.3xx whereas this gain should have been divided by 2 because of the change to 10% Var on the Darwins!

So even Darwins 100% native Darwinex have questionable historical reliability. Especially those undergoing execution problems.

In fact we do not know the quality and density of the data Darwinex uses to calculate the notional Darwins.

In fact, the only valid historical ones are the Darwins’ quotations in the real portfolios of investors, as the notional Darwins of the Darwin Exchange are only virtual.

Virtual does not mean false. But modeling is not an execution on the market, even taking every possible precaution to be as close as possible to reality.

I only believe what I see. And if I’m optimistic about Darwinex, it’s because what I see, what I measure, proves that Darwinex’s replication engine has a technological lead, or even an ethical lead, which means that competitors are far behind :wink: