[PORTFOLIO] demo Portfolio with Darwin heroes of 2021

[CavaliereVerde]

Are you looking for a strategy to print profit every month?
There is no way to acheive it with a darwin porfolio (and neither in other ways from the market).

Filters maybe are not enough, my filter gives me 26 darwins and I have difficulty to keep 10 darwins in my porfolio because of other requirements besides the filter.
Return is not so predictive, there is no reason for the return of the first part of 2021 to be more predictive than the return of 2020.
This does not mean that this kind of momentum investing cannot work with the right tweaks.

 

[IlIlIlIlI]

WGP replaced WFJ as WGP returned to the filter results.

 

[IlIlIlIlI]

Portfolio was restructured according to the filter list sorted by 6 months.
MUF failed the La requirement, ENI was accidentialy sold and rebought.

Currently there are only 12 Darwins in the filter.
ERQ can't be bought.
Theses 10 out of the remaining 11 are in the portfolio now:

 

[CavaliereVerde]

The probem is not the filter but the fact that you are buying and selling darwins every day.
It will get even worse sorting with return on 6m.
You haven't fixed a rotation timeframe so as soon as you see a change you buy or sell.
Look to stock inedxes, they don't update avery day.
Every time you make a change you realize a loss, you buy after a profit and sell after a loss.
Return(6m) is useful to find exciting darwins not to invest, darwins will pop in and out after a couple of lucky or unlucky days.
Momentum investing could work, noise investing will never work.

 

[IlIlIlIlI]

The probem is not the filter but the fact that you are buying and selling darwins every day.
It will get even worse sorting with return on 6m.
You haven't fixed a rotation timeframe so as soon as you see a change you buy or sell.
Look to stock inedxes, they don't update avery day.
Every time you make a change you realize a loss, you buy after a profit and sell after a loss.
Return(6m) is useful to find exciting darwins not to invest, darwins will pop in and out after a couple of lucky or unlucky days.
Momentum investing could work, noise investing will never work.

If a Darwin does not fit the filter criteria and you don't act, your composition is random to the random picture on a certain date.

I don't replace Darwins immediately if they change ranking in the 6m sort, otherwise I must replace ENI today by ULL which will not be done, for sure not today, just because ULL is visible in the filter again with a better ranking.

The problem is that too many Darwins are correlated when they appear in the filter because the traders are trading correlated or the same stuff with the same trading idea, like trading zones.

The second problem is that Darwinex does not support the correlation data reliable or a tool for that for investors. ILR for example does not show any correlated Darwins since weeks.

I could write more, but the biggest lack is that there are no tolls to compare Darwins but filters and the strange correlation calculation. Darwinex didn't improve anything in the last years, no tools for the API etc.

 

[CavaliereVerde]

It is the requirement of +5% on 6m that makes you find few correlated darwins.
Even with a correlation tool you would buy and sell following a result on 6m that is pretty random.
You need a filter that gives you a more stable composition, otherwise you are chasing noise.
It is not a huge job to check correlation manually on a portfolio of 10 darwins.
It becomes time consuming when you make a rotation every day.

 

[IlIlIlIlI]

It is not a huge job to check correlation manually on a portfolio of 10 darwins.

I did that and found out that up to 6 Darwins of the selection result of 15 Darwins are high correlated with the Darwin I'm looking at the correlation.
If I would take only one out of these 6 I can't get 10 Darwins for the portfolio.
So I would lose any attempt of diversification.

It is the requirement of +5% on 6m that makes you find few correlated darwins.

If I set it to +0% (no loser) I get only 12 more (58 instead of 46), and if I remove it I get 62.
That is not really a game changer.
I didn't check how many of the additional ones pass the 50% profit requirement.

 

[CavaliereVerde]

Try to use this:
>https://www.darwinex.com/filter-custom/16037#
CP 4 and you resolve every divergence problem
The 50% profit is a bullshit, many times you have said that past return and past DD should not be so significant, so return(2y) is more than enough.
You are looking for present performers not for dead heroes like SCS that still shows a total return of 450% ...

 

[IlIlIlIlI]

Try to use this:
>https://www.darwinex.com/filter-custom/16037#
CP 4 and you resolve every divergence problem
The 50% profit is a bullshit, many times you have said that past return and past DD should not be so significant, so return(2y) is more than enough.
You are looking for present performers not for dead heroes like SCS that still shows a total return of 450% ...

The 50% profit is taken because I watched too many traders changing their behaviour when they appeared in the 50% filter and got some investors.
Darwinex didn't lower the 50% filter when they cut performance shown with the Pivot calculations, so the behaviour change stayed at 50% performance.

 

[CavaliereVerde]

If you increase Days In Dawinex to 1200 you have exactly 10 darwins.
And no correlated darwins...

Personally I have a lower requirement for Capacity but that would require a manual evaluation of the divergence chart.
Many low CP darwins have a crazy divergence that bumps up and down, look to BGN ...

 

[IlIlIlIlI]

So you think this heroic portfolio idea failed?

 

[CavaliereVerde]

It was designed to find attractive darwins not a stable portfolio.
Divergence and correlation have nothing to do with an attractive trackrecord.
It could work with a lower rotation.
Return(6m) is mostly due to luck, this is the reality even if you don't like it.
Also this new filter is based on return, the significant one, not the old one and neither the lucky one.
High return and low drawdown as you like...

 

[CavaliereVerde]

Let's play a bit with this last filter to understand the problem of noise and rotation.
>https://www.darwinex.com/filter-custom/16037#
Today we have 11 darwins in the filter.
If you select 1year you will notice that we have XSD BAX and BFJ very close to the limit of 10% return.
A losing day of -1% and those 3 are out and probably other 2 or 3 will be in.
So with a daily update you are not improving the composition, only lagging the return of one day.
If we select 2y the situation is much more stable, only one darwin is close to the limit of 15%.

 

[IlIlIlIlI]

This is the list of the original portfolio started on June 21st, 2021.
EOP is closed meanwhile on the same price it was bought and can't be added to the list.
The difference is that the portfolio is only 2 months old while the return is shown in the list is since 3 month.

This is the same list with the 1 month return.

On September 21st, 2021, we can easily get an impression with the 3 months performance how the original portfolio would have performed without any changes in the first 3 month.

It's easy to build a portfolio which looks successful now as you only see survivers, but that's the same bullsh*t like a backtests with the survivors of filter criteria.

IMO not changing anything for 3 months is the same as gambling with lottery tickets where the prices are drawn in 3 months.
In a month we'll see whether that is true.

The big lack is here that Darwinex does not offer to run a filter against historical data. A passionated API programmer might be able to do that on his own machine, but I'm not one.

 

[CavaliereVerde]

IMO not changing anything for 3 months is the same as gambling with lottery tickets where the prices are drawn in 3 months.
In a month we'll see whether that is true.

So what's the point, a filter to find the darwins that wil profit next week? It doesn''t exist.

A passionated API programmer might be able to do that on his own machine, but I'm not one.

The API was designad exactly to buy and sell darwins with high frequency, whera are the results of these developers?
Buying an selling every day is perfect for the brokerthat collects commissions and spread for every underlying trade.

This is what happens with high rotation, buying high and selling low and paying execution costs.

 

[IlIlIlIlI]

So what's the point, a filter to find the darwins that wil profit next week? It doesn''t exist.

No, the point is how to use a filter and how to run a forward test of a filter from the past, not a fooling backtest with survivors.

The API was designad exactly to buy and sell darwins with high frequency, whera are the results of these developers?

That's also what I wonder: where are the results?
Are all these programmers hoping that they can make some cents with the Medel stuff?
I'm sure that project was cancelled long ago, at least in the way it was discussed.

A MendelIA with some notional allocations would be a good solution to get successful portfolios public if the owned agrees. Investors will appreciate it.

 

[CavaliereVerde]

So do you think that holding darwins for days could produce better results than holding darwins for months?

 

[IlIlIlIlI]

So do you think that holding darwins for days could produce better results than holding darwins for months?

That's what all people tried to find out who published their portfolios.
My answer: it depends.
SYO, ERQ and probably also NTI for example could be a nice combination for years,
THA converts to a loser by divergence and fees since 2018.
HFD, LVS, even FSK and most of the others (I don't want to name more of them) made money only for a limited period of time with an undefined and unpredictable exit point.

Money is made or lost only with the exit, not by buying.

 

[CavaliereVerde]

Money is made or lost only with the exit, not by buying.

I disagree.
When you buy the broker makes money.
When you sell you country makes money with your taxes.
When you hold and wait you make money.
This is not me, a famous stock investor stated it.
Darwins are not stocks but the concept is the same.
You make money whe you wait, patience makes the difference.
You hate sitting on losers but without patience there is no profit.

 

[IlIlIlIlI]

When you hold and wait you make money.

I disagree in a lot of cases.

The difference is called swaps.

Broker 1:

Broker 2:

You can guess which one is Tradeslide (Darwinex) where people were/are complaining about swaps.