GENERAL BALANCE 2018
Hello guys, here some consideration more about the Darwin VRT and its performance during the 2018.
- Total Replication of 2018 is + 7.88%
Since the start of previous year the Portfolio has been revisited a little bit to correct some problems concerning VaR and the general exposure during some phases, this because we were / are constantly at work to introduce new things on our systems and improve performance / stagnation without ever derailing from the main purpose our trading idea. During the year the Darwin has worked with a sensible lower VaR in comparison to the past, during first semester due to our modify on the alignment, in the second semester also due to a prolonged period of low volatility that reduced the exposition during some movements with the result of a reduced VaR and so a boosted replication. This however has boosted profit during good months of trading but it has also amplified loss during bad months. Talking about numbers, during previous updates we have marked the performance of our system as always, and so to have a balance, first part of the Year ended with a +17% and during the second part of it some profits were wiped out in particular way during last quarter were the Darwin has reached a new level of drawdown.
That's the result of several strategies, in particular way Contrarian and Volatility ones. Contrarian strategies worked very good, but during last semester had many problems for different reasons: first of all, some of trading pairs were involved in very prolonged trends that not helped in a good way reversal occasions, amplifying the losses not only during weeks but also during weekends with very evident gaps on some pairs/occasions which recorded higher losses due to the fact that the SL protections have been exceeded even more than the double and so good periods of gains were wiped out in just few trades. During the back-test those occasions are cyclical during years and are presented both for the upwards both during downward, more balanced for the upside on the long run. However, when those occasions are presented during prolonged downwards the quote of the Darwin could be a bit more volatile than the usual, but since this, we have preferred to reduce in last times the exposition during the pause. Apart from this, also breakouts were in a very difficult moment, due to a total lack of direction on some traded pairs. Markets were imbued of fast movements alternated with fast inversions, with the creation of narrow and prolonged ranges from which some of them are actually in, stressing some components that uses volatility to select trade occasions.
OUR LAST CHANGES FOR TWISTER FX
- Minor fix on the exposition during weekends, to avoid problems of volatility for the quote of the Darwin due to Market's gaps: this will reduce both gain, both loss over the weekend. Activity will be reduced, not totally erased.
- Doubled the Equity for Twister FX on Darwinex.
- This period gave us the possibility to study other type of strategies both on minor pairs, both on majors, and with the beginning of this new year despite the previous portfolio will be untouched, we will add something more to cover at our best also those type of phases that are giving some problems for some strategies.
- We have also put some work on the capacity side, now the Portfolio is behaving better with a setup the considers more divergence and capacity concerns, as a result of this combined with our previous setup that was still considering spread/slippage problems, during these previous months also the capacity attribute was growing and divergence problem experienced during the year is solved for now.
That's all for now guys, more infos will be released during next times, a big thanks to Investors that are still on the Darwin, for other ones who left, we hope it's not a buying high selling low behavior.