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Correlation, divergence & DarwinIA

12 September 2016

This video explains our monthly Darwinia trading challenge: why we run it, how it works, and what to expect if you win the allocation. We hope you enjoy it!

Remember the Darwinex Correlation test? This feature tracks the correlation between different DARWINS & so you diversify your portfolio’s risk.

Also, as you may recall, the correlation measure determines a DARWIN’s eligibility for DarwinIA’s prizes (out of two highly correlated DARWINS, only the highest level & D-Score DARWIN is DarwinIA eligible).

Many providers have complained that the correlation threshold was too restrictive. Further, the count of active listed DARWINS keeps growing, which compounds the risk of the excess-correlation trigger kicking in!

With this in mind, we’re relaxing the DarwinIA eligibility criteria when it comes to correlation:

1. New (less restrictive) Correlation Thresholds

Starting today, the new, less restrictive DarwinIA correlation criteria are.

  • If a Provider lists 2 DARWINS with a correlation higher than 0.5, only the one with the highest level & highest D-Score is eligible for DarwinIA.
  • If 2 independent Providers list DARWINS with positive correlation higher than 0.8, only the one with the highest level & highest D-Score is DarwinIA eligible.

This significantly reduces the number of DARWINS being left out due to correlation!

2. New Divergence Threshold

With the growing DarwinIA capital allocation and with several DARWINs gaining Assets under Management at speed, the time has come to activate a max. allowable divergence threshold to enter DarwinIA.

We’re activating the lock-out as we’re experiencing a (much) higher than theoretically reasonable divergence with our DarwinIA investments. High divergence  usually owes to low liquidity when some DARWINS trade during illiquid market conditions –  or when providers market strategies / signals to venues other than Darwinex. In some (rare) instances, divergence has spiralled out of control to both Darwinex & investors detriment.

This is why, going forward: DARWINS with negative divergence ≤ – 1% won’t be DarwinIA eligible.

The DarwinIA lock-out mirrors the DARWIN lock-out methodology announced a couple of months ago. As you may recall, DARWINS with a negative divergence below – 1% were supposed to get closed to new investments.

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You may be asking yourself… how come some DARWINS already reached the lock-out divergence level but have not been closed to new investment yet? The reason is simple: we decided against closing them because this would hinder a major improvement for investors that we are working on (sorry, we can’t tell just yet!).

For the time being, instead of closing DARWINS with high divergences, we’ll stop allocating DarwinIA prizes to them.  Also, if you are planning to invest in a given DARWIN, review its divergence as part of our due diligence!

If your DARWIN is not eligible for DarwinIA due to negative divergence, feel free to reach out to info@darwinex.com: nothing pleases us more than helping you profitably grow your assets under management – divergence hurts us much as it hurts you!

 

 

 

 

 

 

 

 

Last News

General Election in Japan (22 October 2017)

18 October 2017

Please note that the Japan General Election is coming up this Sunday (22 October 2017). The outcome of the election could result in market gapping in JPY pairs when market opens. Please make sure you are comfortable with the open position exposure on your Darwinex account and that you have sufficient margin cover going into the weekend […]

Please note that the Japan General Election is coming up this Sunday (22 October 2017).

The outcome of the election could result in market gapping in JPY pairs when market opens.

Please make sure you are comfortable with the open position exposure on your Darwinex account and that you have sufficient margin cover going into the weekend prior to market close at 22:00 (UK time) on Friday (20 October 2017).

As always, at info@darwinex.com we’ll be glad to assist you!

 

End of Daylight Saving Time in Europe (29 October 2017)

Please note that Daylight Saving Time ends in Europe on Sunday 29 October 2017 but our MT4 server time is NOT changing until Sunday 5 November 2017 (when Daylight Saving Time ends in the US). This means that there will be 1 week (29 October through 3 November 2017) where markets will open 1 hour earlier in GMT time […]

Please note that Daylight Saving Time ends in Europe on Sunday 29 October 2017 but our MT4 server time is NOT changing until Sunday 5 November 2017 (when Daylight Saving Time ends in the US).

This means that there will be 1 week (29 October through 3 November 2017) where markets will open 1 hour earlier in GMT time (i.e. FX market will open at 21:01 GMT instead of 22:01 GMT; commodities will open at 22:01 GMT, etc.).

Trading hours will return to normal from Sunday 5th November 2017, allowing for the daily candle to close at the end of trading in New York each day which is widely considered the end of the trading day.

As always, at info@darwinex.com we’ll be glad to assist you with any question you may have!

 

And the DarwinIA winners are…

4 October 2017

The September edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000 notional allocation for a 6 month period. Puesto DARWIN September´s notional allocation 1º $FTT € 300,000.00 2º $KLV € 250,000.00 3º $XTT € 210,000.00 4º $FTAL € 170,000.00 5º $CEM € 150,000.00 […]

The September edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000 notional allocation for a 6 month period.

Puesto DARWIN September´s notional allocation
$FTT € 300,000.00
$KLV € 250,000.00
$XTT € 210,000.00
$FTAL € 170,000.00
$CEM € 150,000.00
$VTJ € 140,000.00
$VQB € 130,000.00
$CLA € 120,000.00
$WPB € 110,000.00
10º $QJW € 110,000.00
11º $FGC € 110,000.00
12º $PUL € 100,000.00
13º $GTD € 100,000.00
14º $RZV € 100,000.00
15º $PGH € 90,000.00
16º $YBG € 90,000.00
17º $FEG € 90,000.00
18º $OOA € 80,000.00
19º $JZH € 80,000.00
20º $EWL € 80,000.00
21º $MBC € 70,000.00
22º $PPP € 70,000.00
23º $LZL € 70,000.00
24º $QTB € 70,000.00
25º $VNE € 60,000.00
26º $VLD € 60,000.00
27º $NIC € 60,000.00
28º $KKH € 60,000.00
29º $XMZ € 60,000.00
30º $VGC € 60,000.00
31º $XIS € 50,000.00
32º $XYP € 50,000.00
33º $RQH € 50,000.00
34º $AXF € 50,000.00
35º $YZF € 50,000.00
36º $ZMA € 50,000.00
37º $JJT € 50,000.00
38º $BAD € 40,000.00
39º $SPI € 40,000.00
40º $JKC € 40,000.00
41º $IOG € 40,000.00
42º $HIB € 40,000.00
43º $ICX € 40,000.00
44º $NLK € 40,000.00
45º $LSC € 30,000.00
46º $ELD € 30,000.00
47º $VVC € 30,000.00
48º $AWE € 30,000.00

Unofficial referendum on Catalonian independence (1 October 2017)

29 September 2017

The unofficial referendum on Catalonian independence is due on 1 October 2017 and some analysts are forecasting losses for the EUR currency as nerves over this potentially disruptive event grow. There is high uncertainty around the outcome of the unofficial referendum, which may result in market gapping in EUR pairs when market opens on Sunday. Please […]

The unofficial referendum on Catalonian independence is due on 1 October 2017 and some analysts are forecasting losses for the EUR currency as nerves over this potentially disruptive event grow.

There is high uncertainty around the outcome of the unofficial referendum, which may result in market gapping in EUR pairs when market opens on Sunday.

Please make sure you are comfortable with the open position exposure on your Darwinex account and that you have sufficient margin cover going into the weekend prior to market close at 22:00 (UK time) on Friday (29 September 2017).

As always, at info@darwinex.com we’ll be glad to assist you!

Darwinex Amended Trading Hours for German Public Holiday (3 October 2017)

28 September 2017

Please note the amended Darwinex trading hours for the upcoming Bank Holiday in Germany on 3 October 2017 (all times are in UK time).  Instrument Trading Hours  FX 22:05 Mon – 22:00 Tue   DARWINS 22:05 Mon – 22:00 Tue  COMMODITIES   Gold 23:00 Mon – 22:00 Tue Silver 23:00 Mon – 22:00 Tue Platinum 23:00 Mon – 22:00 […]

Please note the amended Darwinex trading hours for the upcoming Bank Holiday in Germany on 3 October 2017 (all times are in UK time).

 Instrument Trading Hours
 FX 22:05 Mon – 22:00 Tue
  DARWINS 22:05 Mon – 22:00 Tue
 COMMODITIES  
Gold 23:00 Mon – 22:00 Tue
Silver 23:00 Mon – 22:00 Tue
Platinum 23:00 Mon – 22:00 Tue
Palladium 23:00 Mon – 22:00 Tue
US Crude 23:00 Mon – 22:00 Tue
Natural Gas 23:00 Mon – 22:00 Tue
 INDICES  
Australia 200  23:00 Mon – 22:00 Tue
 Europe 50 23:00 Mon – 22:00 Tue
France 40 23:00 Mon – 22:00 Tue
Germany 30* Closed
Spain 35 08:00 – 19:00
Japan 225 23:00 Mon – 22:00 Tue
UK 100  23:00 Mon – 22:00 Tue
 US SPX 500 23:00 Mon – 22:00 Tue
 US Tech 100 23:00 Mon – 22:00 Tue
Wall Street 30 23:00 Mon – 22:00 Tue
*Amended Darwinex trading hours.

As always, at info@darwinex.com we’ll be happy to assist you!

General Election in New Zealand (23 September 2017)

21 September 2017

Please note that the New Zealand General Election is coming up this Saturday (23 September 2017). Voting closes at 8 am (UK time) and preliminary results begin to roll in in real-time immediately afterwards. The Electoral Commission’s target is to have 50% of polling station results available by 11 am (UK time) on election night and […]

Please note that the New Zealand General Election is coming up this Saturday (23 September 2017). Voting closes at 8 am (UK time) and preliminary results begin to roll in in real-time immediately afterwards. The Electoral Commission’s target is to have 50% of polling station results available by 11 am (UK time) on election night and 100% of results available by 12.30pm (UK time).

There is high uncertainty around the outcome of the election, which may result in market gapping in NZD pairs when market opens.

Please make sure you are comfortable with the open position exposure on your Darwinex account and that you have sufficient margin cover going into the weekend prior to market close at 22:00 (UK time) on Friday (22 September 2017).

As always, at info@darwinex.com we’ll be glad to assist you!