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Inside Darwinex – your Trading Journal

14 August 2013

Imagine accessing the diary of a person you had never met before: wouldn’t this afford you in-depth insight into the personality traits of its owner?

At Darwinex that got us thinking: how about a tool providing in-depth insight into any trading strategy?

Thus came about the Trading Journal: it’s a visualisation containing all the trades in a trading strategy, providing insight into its main attributes – particularly its Risk Management – at a glance.

This is what it looks like (just click the image to enlarge it!) and these are its elements.

tradingjournal

Return:

Measures the strategy’s performance from inception, tracking the value of balance every time a trade is opened or closed (i.e. when a new position starts). The performance calculation takes into account (i) the performance of a trade when it has been closed AND (ii) the performance for the trades that remain open when a trade has been closed.

Range Return:

Shows a strategy’s performance over any user-selected period – offering any potential investor a way to track performance for any period of interest… which comes in handy since recent performance mostly differs from performance from inception!

For instance, a strategy initially losing 50%, the recovering to 100% of the initial deposit could yield 100% performance to investors entering at the lowest point! Range Return is designed specifically to get a more accurate impression of a trader’s performance.

D Leverage:

D Leverage is a measure of risk. It tracks the risk incurred by each position in a strategy in terms of average EURUSD volatility. What does this mean?

  • A EURUSD trade with 1:1 utilised leverage has a D Leverage of around 1
  • A EURJPY trade with 1:1  utilised leverage has usually a D Leverage higher than 1 – this is because the EURJPY is more volatile than the EURUSD in average – and thus riskier
  • What is TS Leverage for simultaneous trades in multiple assets? This is where it shines: D Leverage of 6 means “6 times as risky as the EURUSD over the period”, etc. It captures hedging effects, i.e. two highly leveraged trades in negatively correlated assets can result in a low risk trade

What does a constant evolution of D Leverage say about a strategy? The closer a trader sticks to a D Leverage, the better – this evidences that any positive returns are not engineered by leverage illusions (martingales), where winning trades randomly deploy higher leverage than losing ones.

The D Leverage chart on the Trading Journal uncovers strategies deceiving inexpert investors through such illusions: beware of strategies where D Leverage increases on losing positions.

Trading Journal - Martingale

Open trades:

Tracks the number of simultaneous open trades in a strategy. Combined with D Leverage, it is proof of a trader’s skill at keeping risk constant: good traders open new trades without affecting their D Leverage. In short, this is a powerful tool that evidences a trader’s ability to cover risk by opening new trades (hedging). Beware of strategies in which D Leverage increases with new trades: this is conclusive evidence of the presence of leverage  illusions (martingales).

D Score:

Tracks the evolution of a trader’s D Score. Our goal is to maximise the correlation between a strategy’s current D Score and future returns: our success will empower traders with a high D Score to investor capital!

For now, we offer users a predictive tool of immense potential: the evolution of D Score. Please remember that the D Score is driven by performance and skill: expert traders must prove both to be worthy of investors’ capital.

Distribution of trades:

This chart is useful to know at a glance what kind of strategy a trader uses: frequency of trades, assets traded, duration of trades and simultaneous trades.

It evidences whenever a trader has changed his strategy and is also helpful to find out whether a trader is disciplined when following a strategy.

The trading strategy below shows a good discipline. Note how this trader started trading short trades and kept the number of open trades at a time consistent. Note also how his strategy changed: he increased the number of trades open at a time, being the duration of the trades longer.

Disciplined change of strategy

In contrast to the disciplined strategy above, the strategy below shows no discipline at all. The number of open trades at a time varies constantly and the duration of the trades varies as well…you can tell at a glance there is no defined pattern.

Trading journal - Lack of discipline or strategy

Do you have any question about the Trading Journal? Feel free to e-mail info@darwinex.com, we’d love to improve on the above intro.

Last News
apalancamiento esma

Last night’s incident on MT4 micro indices

14 November 2019

Our MT4 feed on some “micro” indices went down in the night from November 13th to November 14th, 2019. NB: the downtime did NOT affect FX pairs, commodities, stocks and cryptos on MT4, and MT5 operated as normal. This blog post explains what happened and what we did about it. What happened One of our Prime Brokers […]

Our MT4 feed on some “micro” indices went down in the night from November 13th to November 14th, 2019.

NB: the downtime did NOT affect FX pairs, commodities, stocks and cryptos on MT4, and MT5 operated as normal.

This blog post explains what happened and what we did about it.

What happened

One of our Prime Brokers had issues with their “micro” Liquidity Provider on STOXX50E, UK100, GER30 and WS30 in the very early European morning.

We worked with them to isolate, then fix the root cause  and resumed streaming later in the European morning.

Our decision

Our Operations Department has proactively reviewed all affected orders. We will pay affected customers wherever a compensation is due. Luckily enough, some of our customers benefited from this incident and made larger profits than they planned!

If you feel any of your orders ought to be reviewed, kindly reach out to info@darwinex.com. As ever, don’t forget to mention your MT4 account number and (where possible), Order ID.

We keep working hard to improve our liquidity, the better our LPs, the lower the chances that this sort of incidents take place.

Please accept our sincerest apologies for the inconvenience and do let us know if doubts remain. We’ll do our utmost to clarify!

apalancamiento esma

Upcoming Holiday in Japan on November 4th

31 October 2019

There is a public holiday in Japan on Monday, 4th of November. Kindly note that during this time spreads may be wider and liquidity may be thinner. Bank holidays may also give rise to changes on the applicable swap rates.

There is a public holiday in Japan on Monday, 4th of November. Kindly note that during this time spreads may be wider and liquidity may be thinner. Bank holidays may also give rise to changes on the applicable swap rates. For any questions, don’t hesitate to reach out to info@darwinex.com.

apalancamiento esma

Upcoming Holiday In New Zealand Resulting In The Possibility Of Wider Spread

25 October 2019

Please be aware that there is a public holiday in New Zealand on Monday, October 28th during which spreads may be wider and liquidity may be thinner. For any questions, reach out to info@darwinex.com.

Please be aware that there is a public holiday in New Zealand on Monday, October 28th during which spreads may be wider and liquidity may be thinner. For any questions, reach out to info@darwinex.com.

apalancamiento esma

MetaTrader and Wine / PlayOnMac incompatibility on MacOS Catalina

18 October 2019

We’d like to inform you that MetaTrader terminals are currently not working correctly when using Wine or PlayOnMac on MacOS Catalina. CodeWeavers (developers of Wine) are already working on fixing this. We recommend that if you use Wine or PlayOnMac on MacOS, you postpone updating the operating system to MacOS Catalina until a solution is […]

We’d like to inform you that MetaTrader terminals are currently not working correctly when using Wine or PlayOnMac on MacOS Catalina. CodeWeavers (developers of Wine) are already working on fixing this.

We recommend that if you use Wine or PlayOnMac on MacOS, you postpone updating the operating system to MacOS Catalina until a solution is ready.

In the meantime, users who are already affected can continue using MetaTrader on MacOS by installing Windows as an alternative OS or by using Parallels.

For any questions, don’t hesitate to contact us at info@darwinex.com.

apalancamiento esma

Margin increase on 18 October 2019 (Professional Clients only)

17 October 2019

Please be informed that our margin requirements for Professional Clients are changing on Friday (18 October 2019) around 17:00 UK time due to the uncertainty around the Brexit negotiations. Retail Clients are not affected by this change. The new margin requirements described below will remain in force until further notice. In this connection, please note that the new margin requirements […]

Please be informed that our margin requirements for Professional Clients are changing on Friday (18 October 2019) around 17:00 UK time due to the uncertainty around the Brexit negotiations. Retail Clients are not affected by this change.

The new margin requirements described below will remain in force until further notice.

In this connection, please note that the new margin requirements will affect both EXISTING and NEW positions. Kindly make sure you have enough available margin / equity in your account for the days leading up to and during the voting/announcement of results.

 

 

Instrument Current Margin New Margin (Brexit)
FOREX
EURAUD 1.00% 2.00%
EURCAD 1.00% 2.00%
EURCHF 1.00% 2.00%
EURGBP 0.50% 2.00%
EURJPY 0.50% 2.00%
EURNOK 1.00% 2.00%
EURNZD 1.00% 2.00%
EURUSD 0.50% 2.00%
GBPAUD 1.00% 2.00%
GBPCAD 1.00% 2.00%
GBPCHF 1.00% 2.00%
GBPJPY 0.50% 2.00%
GBPNOK 1.00% 2.00%
GBPNZD 1.00% 2.00%
GBPSEK 1.00% 2.00%
GBPUSD 0.50% 2.00%
COMMODITIES
XAUUSD 0.50% 2.00%
INDICES
STOXX50E 2.00% 3.00%
UK100 2.00% 3.00%

 

For the ease of reference, Margin in % =  (1/max. leverage)* 100. In other words:

0.50 % = 1:200 leverage

1.00 % = 1:100 leverage

2.00 % = 1:50 leverage, etc.

Need help? At info@darwinex.com we’ll be happy to assist you!

 

Brexit

apalancamiento esma

Potential High Volatility upon Market Open on Sunday Oct 20th

15 October 2019

We’d like to inform our traders of the possible extraordinary UK parliamentary sitting on Saturday October 19th, 2019 where a vote may be held on any Brexit deal achieved at the EU Council meeting this week.

We’d like to inform our traders of the possible extraordinary UK parliamentary sitting on Saturday October 19th, 2019 where a vote may be held on any Brexit deal achieved at the EU Council meeting this week.

Due to the uncertainty created by this event, we urge our traders to proceed cautiously as market moves may be large. Particular attention should be paid to the market open on Sunday October 20th, where there is potential for high volatility which may cause market gaps.

To manage their account effectively, traders should review margin rates and that there is sufficient collateral to cover their exposure.

For any questions, reach out to info@darwinex.com and we’ll be happy to help.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 66 % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.