How to really profit from the DARWIN Exchange?

I decided to dedicate one of my blog posts to this subject, simply because I believe there are some crucial principles to be taken in order to actually make money with this brand new asset class called “DARWIN’s”.

Basically it’s my conviction you can only succeed and make money long term in this endeavour if you avoid the mistakes made by people who put their money to work in other asset classes too. The first principle is simple, and you will notice all the other principles are related to it: it is absolutely necessary that you approach investing in DARWIN’s as a true investor, not as a speculator.

Altough some will argue there is a blurred line between investing and speculating, the distinction can be made. On the one side when someone is speculating, he is taking high risk, short-term transactions in a certain asset class with the only goal of making huge returns in a short amount of time. It is clearly more related to gambling. Investing on the other side is related to lower risk and funded on the view that a certain asset will produce a steady return on the longer term, based on the intrinsic characteristics of the asset one is exposing himself to. Although one can argue an investment is always a bet, the arguments above show there is a true difference in approach.


Are you prepared to lose money in this risky environment?

One important, though often underestimated, step is the awareness that you are participating in a high risk environment. Once you buy a DARWIN, your money is exposed to the wild and often volatile currency market. Even in case you buy the worst DARWIN’s, you will probably never lose all your money invested on the DARWIN exchange (Darwinex has build-in risk management tools who close any trade when the trader behind your DARWIN exceeds risk limits), but for your own health: make sure you are comfortable with losing the money transferred to your Darwinex wallet. If you don’t, you will more like be tempted to break the other principles.


Picking the right DARWIN’s.

Picking the right DARWIN(s) is the logical second, and maybe the most important, step on your way to generate a huge return on the DARWIN Exchange. Approaching the DARWIN market place as an investor, implies that you selectively pick DARWIN’s with a high (intrinsic) value. In this case I think we can agree that value equals ‘trading talent of the trader behind the strategy‘ or the potential of a strategy to generate a consistent return over a long term period. Darwinex offers the tools to play with certain parameters you like yourself. Make sure you keep an eye on my blog because I am already writing a post about how I think you can easily scan the exchange for true trading talent. In the meantime I think this blog post of jltrader is a good start.


Stick to your investment, in good and bad times.

Once you have selected your DARWIN(s), you will have to keep them for a (very) long time. You can only do this if you made your DARWIN analysis the right way (remember: blog post is coming…). If you found true trading talent in the selection process, you just will have to stick with your investment in order to profit. Think about it: will true trading talent just disappear because a trader had a bad month, right after the moment you invested? Of course not, most skilled traders will have one, two or even three losing months. On the other hand, will a profitable trader stop being profitable after a long time of profits? Again: of course not. So selling your DARWIN after a long winning streak might not be the smartest decision. Both cases prove the point: keep your DARWIN until the trader calls it a day and retires because he has made both you and himself very wealthy.

Those principles are my own opinion, based on several years of experience in the forex market. It is how I invest in other traders and how I think people can profit the most by investing in my own trading strategy. If you have comments or other ideas on this topic, I would like to hear your insights.