I dont want to rewrite all ideas to new article, because I want to let you see my suggestions exactly same way, how I answered to DFC development team.
I will remind you key point from previous article. I wrote this response, because I would like to eliminate gap between demo game trading and real live trading, which is more interesting for investors in trading network.
We have some contest rules, which make contest just like a game. I want to try replace them by something more relevant.
1. Only 1 position could be opened at any instrument (if there is already an entry order, there is no possibility to open a market order and vice versa).
It is very important to do not averaging loses. But in real trading, most of the richest trades in the world are building positions from beginning with small amount of money and after trend dynamic they add constant amount to increase volume in very best trend flowing trades. So this rule is contra productive and eliminates one of the best trendflowing strategies.
Solution: Set up position limit per one instrument for example to 3 positions, which have distance between each other for example 30 pips. We will avoid only averaging negative trades.
2. Popularity points - summary of three ratings. Maximum 25 points.
I understand this social dimension of trading networks, is powerful tool, but do you really think that busy trader have time to evaluate and comment other traders to get points back? I think it’s better to trade and get fair evaluation from people who are really interested about trades. This rule can kick best traders out of top ten and brigs other traders in. no matter if they are good enough.
Solution: I suggest completely cancel this evaluation. Likes and comments should be only voluntarily support from other SPs. For other contest should be part of evaluation, but in trading contest is damaging.
3. Dukascopy evaluation
Share of trades made with conditional orders (the more - the better)1 - 20%
This rule has sense, when you need eliminate bad execution on investor accounts. It make sense if conditional orders are close to actual market price , but 10 points is too much for major pairs and disaster for pairs with low volatility. Let me say, that intraday trader with target around 20-40 pips is out of the game by this rule. 100 trades per month mean 1000 point minus in global rating. And what is most important thing? This rule has effect damage for investors. I am sure that investors can accept slippage 1-2 pips average on trade, but they probably will not be happy if somebody cut 1000 points profit from their performance on account.
Solution: I suggest that will be better to cancel this evaluation. More significant for investor should be measurement of average slippage on live accounts following SP signals. Investors can choose if they would like to participate on signals. But there is no reason to evaluate these conditional orders, because this rule has nothing to do with trading skills. Of course default set up PT and SP is good idea, but best traders are managing their traders in actual situation, they are not waiting to get filled. Especially on profit targets.
Average pips gained on positive positions (the more - the better) - 20%
Average pips lost on negative positions (the less - the better)2 - 20%
Win/Loss ratio - 20%
These three rules have in my opinion only sense as combination together. 60% of evaluation points is too much.
Solution: you can easily replace this first two points by Avg. pip-points outcome from all positions. It’s more significant for investor to figure out how much money he can get from every single signal.
And you can prevent to manipulation, when contestants try to averaging one or two huge losses by many small to get better dukascopy points evaluation.
Question is , if you want to add more parameters to calculate evaluation, or if you want to set up very simple rules with targeting only to best equity results.
In next step, I will design performance points, pip points parameters and Equity/Drawdown evaluation. These three categories deserve special attention.