Darwinex Zero

UK traders: we're finally coming to you. Two in-person Darwinex Zero events. Manchester on 6 Nov, London on 7 Nov. Come and talk trading with the team and the community. Free, but spots are limited (link to registration below)

Your DARWIN should be your proudest asset. Drop an image of your DARWIN below with your ticker! 👇

Manchester. London. Two cities, two rooms full of traders who don't settle. Thanks to everyone who joined us last week. For the sharp questions, the debates and the conversations that ran well past the agenda. Trading is a profession. Last week, the room acted like it. See you at the next one! #DarwinexZero #Trading #TradingCommunity #Manchester #London

We don't know how many wins and losses we're going to get in a row. We don't know what to expect going forward from our results or anything that we're building. What we can control is how much we are willing to lose in a single day.

JHYG wins on 35.22% of trading days. It’s up +38.33% since inception and just set a new all-time high. Small losses, bigger wins: the best day was +5.48%, the worst -1.58%. A low hit rate doesn’t matter when the payoff is skewed your way.

Drawdown is where every trader spends most of their time. New highs are earned by getting through it. DARWIN KVNM has just set a new high. There’s no celebration lap here. It simply confirms what the data shows time and again: consistency and patience pay off. The process held through the drawdown. The equity curve has now caught up.

Drawdown is a pretty difficult metric to use when judging a trader's ability to maintain risk walking forward. The reason is that drawdown is a backward-looking metric, and it shows the distribution of what's already happened, but it doesn't show how a trader behaves and how a trader manages risk in real time. A trader might be lucky for a year, two years, maybe even longer than that, and the worst drawdown is always the one that's ahead of them. Monitoring their value at risk, which is a forward-looking risk metric, as well as their loss aversion, you can gain a truer insight into how they manage risk.

LIVE: Monday Map | Market News nitter.cf/i/broadcasts/2evWKEzOM…

Capacity is the first thing a serious allocator wants to know about a strategy: how much money can it take before the edge starts leaking away? A backtest won’t tell you. It assumes you get filled at the price you wanted, every time, at any size. Live markets don’t work like that, and slippage is where it shows up first. Say you get slipped two pips and you’re trading with a four pip stop. Two pips of slippage on a four pip stop means you’re paying up 50% on that risk. Two pips doesn’t sound like a lot. When it’s 50% of your risk on the trade, and you’re losing it purely to slippage, that’s a lot of money. Now take a 10 pip stop with the same two pips of slippage. You’re only paying up 20%. With a 100 pip stop, you’re paying up 2%. So you can see how slippage becomes a problem when we’re talking about big capital. If you’re trading millions and your stop is set at roughly a 50 grand loss, paying up 50% on top of that turns it into a 75 grand loss. Same trade, same stop. The only difference is how exposed you are to slippage. What I want you to take from this: slippage stays the same in pips, but it costs a different percentage depending on your stop. The tighter your stop, the bigger the bite. Before you think about scaling a strategy, work out what one or two pips of slippage does to your average loss compared with your stop size. If the number already hurts at small size, it will get worse as you scale, because bigger orders tend to get slipped further. A strategy with room to absorb that is one that can actually take capital.

No strategy is going to have 100% win rate. And that means at some point in time you are going to be wrong about your ideas.