What is SMI and how does it work?

What is the darwin SMI?

• darwin SMI is an invertible synthetic financial asset that replicates the operations of its manager @millas in real time, in other words it is a fund that replicates the strategy that the manager has decided to implement in this darwin.

• To offer greater security to the investor, Darwinex, through its manager regulated by the FCA (UK), manages the investor's risk by normalizing it to a known risk level (between 3.25% and 6.5% of monthly VaR with 95% confidence level), thus transforming the trader's activity into an investment product.

• Darwinex also certifies the results of the darwin, since all operations are carried out through its broker and it has absolute control of the data, publishes it and shares it openly, completely preventing the trader from manipulating the information in any way.

How does the darwin SMI operate?

The darwin SMI replicates the trades of the underlying strategy. The underlying strategy operates:

• In a fully automated way

  • The systems that operate at SMI are 100% algorithmic trading, fully automated and operated by robots 24x365 on a private server located in UK with a German Data Center. Thanks to this, we leave out the emotional biases of discretionary trading.

  • This means that all the operations of opening and closing positions, setting stop loss and take profit and even the size of the positions is carried out in a completely automated way, without any type of human intervention.

• With Swing strategies, in the Forex market

  • About the 28 pairs that are formed by combining the 8 main currencies. You can see more in In which assets does SMI operate?

  • Not only looking for profitability but also looking for de-correlation between the systems and the markets where the robots operate.

  • With systems that work on 4-hour candles (H4) and 24-hour candles (D1), designed to achieve operations with sufficient margins. More information in What kind of trading does SMI execute?

  • With a low level of leverage, such as our D-leverage, a measure of the combination of volatility and leverage created by Darwinex and which allows the level of leverage to be correctly measured and compared.

• With adequate monetary and risk management

If you invest a little time on this website, you will be able to see that there is a repetitive and reiterated idea on its pages and this idea is risk management and money-management. You can see this part in detail in How does SMI manage risk? Anyway some brushstrokes:

• We have active and passive safety elements.

• Fixed money-management measured in € and as distance to stop.

• With a clear objective of having the risk of exposure to the different currencies that make up SMI's portfolio balanced.

• With a minimum of 10 automatic systems (boots or robots) operating simultaneously 24x365

  • Despite this availability, the robots operate mainly in the time bands where the spreads are reasonable, minimizing to operate the hours where the spread forks are too wide due to lack of liquidity and that would penalize the profitability of the systems.

  • With the aim, whenever possible, that in each traded pair we can implement systems, as uncorrelated as possible (different levels of stop and take profit and different input and output variables), seeking as far as possible, what which in the sector is called trading on the coast, that is, having a system operating with an ambitious objective and another system operating shorter sections, and even operating against the direction of the first.

  • We detail the reasons for this number in How many robots operate in SMI and why?

• With a process of continuous and objective evaluation of performance and a clear methodology for generating systems

  • Despite the fact that the timeframe we work with is H4 and D1, the performance is evaluated weekly and the generation objectives of the following systems are defined. You can obtain more information in What is SMI's continuous performance evaluation process like?

  • With a very focused methodology and consistent with all the reasoning of SMI. We detail it in What is the robot creation methodology for SMI?

• With a reliable manager and supplier

You can see expanding aspects of the SMI manager in Who is the SMI manager? and see a summary, from our point of view, of Who is Darwinex in Who is Darwinex? What is a Darwin?, but we think the best thing you can do is visit their website at https://www.darwinex.com/investors