Pretty failure from the lack of protection from the VaR here, with -70% realized in about 1 hour time. Although, an investor could (should ?) have planned a stoploss in advance.
On that day, about 2500 positions were fired up during a 1 hour window, which appeared to be far outside the usual behavior. The D-leverage however was within control so the Risk Manager really did not stop the bleeding.
Probably a coding mistake of logic of the EA or applied to the wrong timeframe, ticks instead of Mx ? Here, the mess is all over, maybe shooting wrong trades in both directions within a same candle, don’t know for sure but the acceleration of pace was heavy. The analysis in details is not eased from the consolidated reports of that 31st january 2018 which seemed to be a pretty ordinary day.
Considering that Darwinex has many algo strategies on its shopping stands, better not be a bad luck investor who’s accustomed to walk on a landmine going outside.
Aren’t algos supposed to protect us from such a trade frequency unexpectidly shooting through the roof outside all reason ?
If protection on this point shows technical failure into details, maybe it represents an argument for strategies to specify whether they are manual or algorithmic.
Probably, it wouldn’t have happened to this extent to a discretionnary bionic/trans-human person yet. So investors could also make educated choices along this path.