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Calibration stage

On account opening, there is a calibration phase prior to the creation of a DARWIN such that our risk engine can appropriately gauge your trading style.

Once you have created your Darwinex Zero account, there is an initial calibration stage prior to the creation of the DARWIN, which is necessary for our system and risk engine to gather enough information about your signal account to set up the DARWIN replica correctly.

Requirements to create the DARWIN

During the calibration stage you must complete 25 risk-equivalent trading decisions over a minimum of 15 trading days.

There is no requirement in terms of return, our system just needs enough information (measured by the number of trades and trading days) to be able to create the DARWIN.

Time limit

No minimum return is required to complete the calibration stage but there is a time limit of 90 days from subscription.

This time limit is set for inactivity reasons. However, if you are actively trading, you can take longer than 90 days.

The track-record accumulated during this period will be aggregated to the DARWIN once created.

What is a risk-equivalent trading decision?

In order to calculate the exposure of a trading decision, we follow the steps below, our system calculates the market exposure of each position using the following formula:

Exposure = D-Leverage* x √Time (duration of the position)

Then, to obtain 25 risk-equivalent trading decisions, we perform the following scheme:

  1. The system takes as a reference the position with the greatest exposure and assigning 1 trading decision to this one.
  2. To calculate how many representative decisions the remaining positions are equivalent, the calculation is: √(exposure of each position) ÷ √(exposure of the position with the greatest exposure) 
  3. ll position's representative decision are added up to make 25 trading decisions. 

D-Leverage

The D-Leverage is Darwinex's own tool which standardizes the risk of all positions using the EURUSD as a reference.

To calculate the D-Leverage, we take into account both the nominal leverage and the underlying volatility of all the trades opened simultaneously, and we compare it with an unleveraged trade on the EURUSD.


Example

Imagine a signal account with these positions:

1.- D-Leverage = 20 Duration = 30 minutes / Exposure: 109.5
2.- D-Leverage = 24 Duration = 35 minutes / Exposure: 141.9
3.- D-Leverage = 30 Duration = 45 minutes / Exposure: 201.2
4.- D-Leverage = 22 Duration = 10 minutes / Exposure: 69.57

Then, the position 3 has the greatest exposure and represents 1 trading decision. Remaining positions represent:

  • Position 1: √ 109.5 / √ 201.2 = 0.73
  • Position 2: √ 141.9 / √ 201.2 = 0.84
  • Position 4: √ 69.57 / √ 201.2 = 0.58

Hence, the accumulate representative decisions are 1+0.73+0.84+0.58=3.15

DARWIN creation

Once the calibration requirements are met, your DARWIN will be created automatically on the next scheduled creation date.

What happens next depends on your membership:

  • Standard Membership: Your DARWIN automatically participates in DarwinIA SILVER.
  • Lite Membership: Your DARWIN does not participate in DarwinIA. It continues building a verified track record and can later become eligible for investor capital once criteria are met, and buy boosters.

The calibration requirements and DARWIN creation process are the same for both memberships.

You can keep trading once the calibration stage is completed, any trading activity will be included in the DARWIN once it's created.

You will be able to check a progress bar in the righ side of the screen. Once the experience needed is achieved, the date for the expected creation will be available:

Do you want to learn more?

If you want to learn more about the initial calibration stage, we encourage you to watch the following video:

 


Relevant blog articles

Calibration phase explained
Risk management in trading