Trading Strategy Performance

Effectively Comparing Trading Strategy Performance | Darwinex Platform Tools

When comparing trading strategy performance, it can often be challenging to compare very different trading strategies accurately. A scalping strategy that trades hundreds of times a day for short periods is very different to a seasonal strategy that trades once a month.

Likewise, it can be hard to know what effect different parameters within a strategy have on performance as part of the research phase. The Darwinex Performance (Pf) Investible Attribute can help solve both of these problems.

Every trading variable will have a different effect on the performance. Different Asset Classes have different risk profiles, and as such, trades with the same volume will contribute different levels of risk to a portfolio.

This is evident when looking at the returns of bonds vs equities. An equal weighting of bonds and equities will result in the more volatile asset, equities, contributing more volatility to the portfolio.

Trading frequency is another consideration. Assuming equal trade sizes, a strategy that opens multiple daily positions will have a higher risk profile than one that opens new positions only once per month.

Although they may have the same overall return after the same period, how they each get there will be very different. The strategy with the higher frequency will have higher trading costs. On the other hand, the longer-term strategy will be in the market for longer and will be exposed to more market risk.

Understanding the differences between each strategy or variable will enable you to more accurately make trading decisions that give you the best chance of success.

Comparing Trading Strategy Performance

The Darwinex (Pf) Investible Attribute does a great job of comparing and cleverly ranking strategies, and the accompanying video covers this in great detail. It’s thoroughly recommended viewing.

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:
https://www.darwinex.com/legal/risk-disclaimer


Content Disclaimer: The contents of this video (and all other videos by the presenter) are for educational purposes only, and are not to be construed as financial and/or investment advice.

DarwinIA winners Q1 and Q2 review | Six months of DARWINs’ in 2021

Six months into the 2021 DarwinIA, it’s time to take a look at the who’s who of DarwinIA winners so far.

What is DarwinIA?

For those unfamiliar with DarwinIA, DarwinIA is Darwinex’s prop trading allocation. Every month Darwinex invests up to €7.5 million in the top 120 DARWINs. The DARWIN providers get to keep this allocation for six months and earn performance fees.

Every month the top 3 “winners” (really, there are 120 winners, but this would take too long to mention them all individually) are displayed on the website, shared across social media and mentioned in the DarwinIA winners edition email.

Thus giving these DARWIN providers more exposure. All DARWINs in DarwinIA are eligible to attract third-party capital.

All 120 DARWINs that receive allocation are published on the DarwinIA standings page.

DarwinIA winners.

December 2020*

EEY – mufxtrading – €17,000

HEO – wavetrading – €44,000

NWO – Positivebit – €252,000

January 2021

XYQ – Jhui – €165,000

TDD – TwentyEight – €300,000

TVG – trizzard – €45,000

February 2021

FFV – monira – €233,000

BAX – corni – €116,000

OOP – TradeSignalMachine – €35,000

March 2021

QJU – BearVsBull – €32,000

IZU – Taigosan – €300,000

LWK – LEVAN – €32,000

April 2021

NVL – Farid – €22,000

VVC – VictorD – €71,000

IVP – PiKG – €37,000

May 2021

SKI – StokesBay – €360,000

VRT – VolcanoFX – €163,000

OOS – pepewin – €252,000

*Allocation is based on the previous month’s performance. So DARWINs who receive their allocation in January will have been top performers in December.

All DARWIN allocations have been rounded down to the nearest €1,000.

The first thing that stands out is that there have been 18 different DARWINs from 18 DARWIN providers who have won allocation in the last six months.

Remember that Darwinex allocates capital to the top 120 DARWINs, not just the top 3. For instance, NWO, who won the December DarwinIA, has more recently placed 5th in April, and 38th in May, earning them €180,000 and €60,000 respectively.

Due to the vast quantity of high performing DARWINs receiving DarwinIA allocation, this post can only highlight the top 3 performing DARWINs of each month.

The second thing is that there have been 18 different DARWIN providers. This variety highlights the competitive nature of DarwinIA and trading in general.

This competition is of benefit to both Traders and Investors alike. For Investors, it provides them with an outstanding variety of Investment options. For Traders, it encourages them to look for new ways to create positive returns.

So 18 different DARWINs from 18 different DarwinIA winners. How’s that for Diversification?

Big or small. It doesn’t matter.

It’s also good to see smaller accounts getting excellent size allocations. If you look at EEY and NVL, for instance. EEY has 21x their equity in DarwinIA allocation; NVL has 19x. NVL also has six investors.

This highlights that you don’t need a large account to make a difference. This is the very ethos DarwinIA is built upon. Helping traders achieve their full potential, with an avenue into attracting third-party capital.

However, on the other end of the spectrum, you have the likes of TDD who has €300k from DarwinIA and over $100k from 26 investors, IZU with €420k from DarwinIA and $119k from 10 investors, and SKI with €492k from DarwinIA and $386k from 79 investors.

It really doesn’t matter if you have a small account, a larger account, a few investors or lots of investors. If you have a trading strategy that performs well, you stand a chance of attracting third-party capital.

If you’re a trader and you don’t already have a Darwinex account, you could be missing out.

What will happen in Q3? Another three different winners? Or will one of the existing providers add some more allocation to their DARWIN?

Brought to you by Darwinex: UK FCA Regulated Broker, Asset Manager & Trader Exchange where Traders can legally attract Investor Capital and charge Performance Fees.

Risk disclosure:
https://www.darwinex.com/legal/risk-disclaimer


Content Disclaimer: The contents of this video (and all other videos by the presenter) are for educational purposes only, and are not to be construed as financial and/or investment advice.