darwin discussion

Quoting Flowtrader29

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{quote} Great, I Will Watch the var. Have you done anything specific to keep it below 4? I am thinking of lowering my risk significantly for a period of time until I have recovered and not worry much of how much profit i make. The permanent allocation is the reason I haven’t reset the account. Glad I got it before it was removed.

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Quoting Noisy

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Quiet in here. Pipmaster is still on the Yacht and Hayseed is busy with buying more boosters :-)

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Quoting hayseed

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{quote} //---- yes..... couple things..... it seems to help me trading the minimum size...... 1 contract in futures..... i will have multiple entries, but all 1 each..... also try to keep my margin percent level as shown in the metatrader platform above 3000%..... at least never below 1000%...... averaged across all my accounts my multiplier is about 1.25 ....... 2 is far better....... this makes up for my low trade size..... we are all really still learning here..... mostly by trial and error......h

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Quoting pipmaster77

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{quote} Yes, absolutely trial and error....I am taking one of my Darwins (futures) and doubling the size....max DD is 6.6% now ......I'll take 12-13% DD for 50-60% annual return. I will hold less time and use tighter stops to hopefully keep risk engine smiling at me. Actually think I can do better utilizing the skills I learned from the props.....I am going to try to flip this account in a year. With a 500K booster and minimum 300K allocation(Gold).....would pay 120K per year, plus fairly certain 100% annual would separate me and earn significant...

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Quoting hayseed

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{quote} //---- i might should do the same in 1 account..... right now trying to get a firm grasp on target risk...... have read the docs dozens of times but it seems inconsistent when observing my accounts...... not completely sure just what effectively has control over the target risk percent..... many of my accounts have target risks in the low 3's..... couple in the 5's..... don't think any are at 6.5...... my average drawdown across all accounts is most likely 4....... couple in the 5's, one in the 6's....... most are between 2 and 4..... still...

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Quoting hayseed

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{quote} //---- i might should do the same in 1 account..... right now trying to get a firm grasp on target risk...... have read the docs dozens of times but it seems inconsistent when observing my accounts...... not completely sure just what effectively has control over the target risk percent.....

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Quoting hayseed

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for me to increase the target risk i would have to increase my contract size

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Quoting Noisy

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I’ve upgraded to monthly payouts, so IF I’ll get the 30k Silver Allocation for May and end up profitable, my first payout could be June. Would have to make 2% in May to cover the 90€ paid for April/May.

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Quoting hayseed

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{quote} //----- ok...... figured it out...... your target risk is your monthly var/risk multiple...... my target risk is low because my monthly var's are low...... averaged across 20 accounts my monthly var is 3.44..... real example is ..... 2.01 risk multiple, 2.56 monthly var will have a target risk around 5.25 ..... my var's are low because of using very little of my available margin...... i have little value at risk...... for me to increase the target risk i would have to increase my contract size or trade instruments with high margin required.........

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Quoting codemaster75

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{quote} Just wondering if you've ever come back from a drawdown of say 10% and continued on? If this happened on your Darwin, would you continue on, cancel or restart? I'm trying to understand your level of thinking. You have gone to a lot of trouble to get what you would probably call the ultimate Darwin setup, but have you ever proven to yourself that you can have a profitable period of trading over say 6 months? Wouldn't it be much better to just trade for a year paying fees and learning about yourself, your system and the risk engine? So that's...

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Quoting hayseed

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{quote} //----- decided to proceed...... will try to increase my target risk to 6 by slowly increasing total position size to increase margin used ...... still 1 contract per trade...... in this account i'm using 43,400 in margin..... free margin is , 1,023,512........ margin percent, 2,458...... will keep margin percent above 2000..... 43,400 is equivalent to a single gold contract.......h //------ {image} {image}

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Quoting Noisy

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{quote} I'm wondering if you should even be changing the position sizes. As far as I understand, the risk engine is responsible for precisely that and should scale your target risk up to 6.5% VaR if it's below that. Perhaps this doesn't work so effectively for all Darwins in practice if the risk in the signal account isn't consistent/stable enough, or it simply takes a very long time for the risk engine to gather enough data points from your signal account.

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Quoting hayseed

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{quote} //----- no..... that's what most people think and say but it verified incorrect by me personally..... as far as my accounts, the risk multiple is accurate across all..... it increases as i refine my trades...... it appears to me, verified across all my accounts, you are correct about being important to keep your signal account stable..... again, verified across all my accounts, you can move your risk multiple up far faster than most believe...... or lower it faster......h

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Quoting hayseed

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{quote} //----- no..... that's what most people think and say but it verified incorrect by me personally..... as far as my accounts, the risk multiple is accurate across all..... it increases as i refine my trades...... it appears to me, verified across all my accounts, you are correct about being important to keep your signal account stable..... again, verified across all my accounts, you can move your risk multiple up far faster than most believe...... or lower it faster......h

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Quote

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Darwinex Zero uses a proprietary Risk Engine to normalize all trader strategies (signal accounts) into an investable asset—a DARWIN—with a standardized maximum monthly Value at Risk (VaR) of 6.5% at a 95% confidence level.

This means the algorithm scales the leverage of the underlying strategy up or down to ensure the DARWIN's risk remains consistent, regardless of the risk the trader takes on their private signal account.

Key Risk Engine Scaling Mechanism (6.5% VaR)

1. Target Risk: The goal is a maximum 6.5% monthly VaR (95% confidence).
2. Actual Risk Range: The Risk Engine typically keeps the DARWIN's VaR fluctuating between 3.25% and 6.5%.
3. Formula: The leverage is adjusted using this formula:
4. Scaling Up/Down: If the underlying strategy's VaR is lower than 6.5%, the engine increases the leverage. If the strategy's VaR is higher than 6.5%, it reduces the leverage

Quoting pipmaster77

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What I am still trying to wrap my head around is this....our signal account never resets..... So, in theory, just as if you were compounding a personal account, shouldn't WE NEED to size up to obtain the same returns?

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Quote

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Using a percentage risk per trade (e.g., 1% or 2% of equity) rather than a fixed position size (e.g., buying 100 shares every time) offers several crucial advantages for managing capital and mitigating risks. The main advantages include protecting capital against large losses, automatic scaling as the account grows, and reduction of emotional stress.

Key Advantages:

1. Capital Preservation: By risking only a small, fixed percentage (usually 1–2%) of capital on a single trade, even a long string of 10 consecutive losses would only reduce the account by 10–20%, leaving it easily recoverable.
2. Automatic Scaling (Compounding Growth): The position size automatically adjusts based on account size. If the account grows, the dollar amount risked on each trade increases, compounding gains; if the account shrinks, the amount risked decreases, protecting the account from further, massive drawdowns.
3. Reduced Emotional Intensity: Knowing that no single trade can "blow up" the account reduces fear, revenge trading, and impulsive decisions.
4. Consistency Across Different Stop-Loss Distances: If a strategy requires a wide stop-loss, a fixed position size might cause a 5% loss, while a strict percentage risk model would adjust the position size down to keep the loss at 1%.
5. Adaptability to Market Conditions: Percent risk allows traders to adjust their position sizes based on volatility. In a volatile market, a tighter position size (with a larger stop) keeps the monetary risk consistent, whereas a fixed lot size might result in over-leveraging

Quoting Noisy

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Well but that's precisely what Darwinex advertises and what the official documentation describes about the Risk Engine. .

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Quoting pipmaster77

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So, in theory, just as if you were compounding a personal account, shouldn't WE NEED to size up to obtain the same returns? If I am trading 1 contract on a 1 million dollar account, will I not need to be trading 2 on a 2 million dollar account? The other thing I am trying to adjust for is we are paid on the % gain on our quote, not what we actually make * risk multiplier. For example, I made 0.33% today, but that is only 0.28% on my quote and that is what I am paid on. So I have increased size on the futures account resulting in a...

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Quoting hayseed

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{quote} //---- that would depend on what you mean by same returns...... if your thinking about % returns yes, the size would have to be doubled....... if your talking about dollar returns, in that case both accounts could trade the same size...... how we are paid kinda confusing because there are so many factors...... that's why i wrote the mq5 script to calculate actual money paid before..... the easiest way for me to grasp it is, in a futures account, once you have 7 million in funding with a risk multiple of 1, you will be paid exactly what your...

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Quoting pipmaster77

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{quote} Yes, that 7 mil in funding with a multiplier of 1 is a very simple way to look at it. What I am getting at is this, using a risk multiplier of 1 for simplicity, if I make 50K on my 1 million dollar account it is 5%, if I am funded 1 million, I will be paid $7,500. Fast forward 10 months, same return every month account is now 1.5 million, if I am trading the same size as 10 months ago and make 50K, it is 3.3%, so I am only paid 5K.....or will the risk engine multiply me 1.5 for trading the same size wth an equity 1.5 times larger? If the...

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Quoting hayseed

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{quote} //----- your not fully understanding what your reading...... plus your focusing on the wrong things...... as said to you several times in the past, your time today would be better spent writing down now your trades for next week..... until you can do that odds are against you...... but financial success is not all that important or might not be your goal..... i have some friends that spend 10's of thousands on hunting leases in mexico...... some spend thousands on skiing trips...... some the same on attending tennis matches around the world.........

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