By Steven Hatzakis
February 18th, 2019
Last Updated: May 7th, 2019
The ForexBrokers.com Annual Review (3 years running) is among the most cited in the industry. Our Head of Research, Steven Hatzakis, is frequently referenced as a leading analyst covering forex brokers and cryptocurrency. Learn more.
Founded in 2012, Darwinex, through its Darwin Exchange, provides a unique approach to social copy trading where strategies are traded as financial assets based on their net asset value (NAV) indexed to 100. Darwinex currently manages nearly 36 million in assets.
When a trader creates a trading strategy – known as a Darwin – within the Darwinex community, investors can buy and sell these strategies by selecting the respective Darwin symbol. Each month, the top performing Darwins are eligible to receive allocations from a pool of four million of the firm’s own capital.
Investors can also build portfolios consisting of Darwin strategies (there are more than 1,000) created by a trading system developer. Strategy creators who share their strategies in the Darwin community do so via the available MetaTrader platforms, which are also used by self-directed traders to access 39 forex pairs, 36 single-stock CFDs, 10 indices, and six metals contracts.
While not known for its self-directed forex offering, Darwinex, through its Darwin Exchange, provides forex traders a unique social copy trading community that enables investors to buy and sell trader-developed strategies.
- Darwin Exchange provides a unique community for copy traders.
- Narrow list of forex pairs for self-directed trading.
- Limited range of traditional research tools.
- Poor quality customer service.
Trading with a forex broker traders can trust is crucial to success. Unfortunately, forex fraud and scams are common in the industry. To help investors find trustworthy brokers, we have created a proprietary 1-100 score (the higher the better), which we call Trust Score.
|Publicly-Traded Company (Listed)||No|
|Regulated in Major Hub||Yes|
|Regulated in Emerging Hub||No|
|Authorised in the European Union||Yes|
Commissions & Fees
When it comes to commissions and fees at Darwinex, trading costs vary depending on whether users are investing via the Darwinex platform or carrying out self-directed trading on MT4 and MT5.
- Investors on Darwinex pay a 20% quarterly performance fee to the trading systems developers per Darwinex strategy, only if the performance of the said strategy achieves a new high watermark (net new profits above a prior high when the investor started), which is comparable to a hedge fund incentive fee structure.
- Darwinex also offers liquidity rebates for investors, comparable to an active trader offering when the monthly commissions paid by users surpass certain thresholds (commission tied to volume).
- All users, including investors and self-directed traders, incur the spreads on each trade – plus commission, as Darwinex is an agency-broker (non-dealing desk). Spreads are variable, and the round-turn commission added to each trade varies depending on the currency pair traded. For example, on the EUR/USD pair, the commission is €2.5 per side for every 100,000 units (one standard lot) which equates to €5 per standard lot round turn (RT), whereas, on USD/JPY the RT commission is $5 per standard lot.
- Using live spread data from the broker’s website, which is not meant to be indicative of average spreads, the EUR/USD was generally 0.2 to 0.3 pips.
|Minimum Initial Deposit||$500|
|Average Spread EUR/USD - Standard||N/A|
|All-in Cost EUR/USD - Active||N/A|
|Active Trader or Premium/VIP||Yes|
Platforms & Tools
Darwinex offers its own proprietary software (for copy trading on the Darwin Exchange) alongside the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms.
- The Darwinex web-based platform is built using HTML5 helping support the latest web standards and offers users a nice layout and clean design. It is easy to analyze the historical performance of a particular Darwin strategy and there are multiple tabs for further analysis.
- The DarwinIA section shows the most recent Darwins to receive funding allocations from the company’s monthly allocation of 4.5 million Euros. This information is made transparent for all investors so anyone can participate by investing alongside these featured money managers.
- It is easy to analyze the historical performance of a particular Darwin strategy and there are multiple tabs for further analysis.
- As a social trading platform, Darwinex offers several innovative features, ranging from custom filters to risk-management settings. However, self-directed traders may be challenged as there are no charting facilities, streaming forex prices, or trading functionality outside of buying and selling Darwin strategies.
- Adding additional self-directed trading tools to the platform such as forex rates and charting would level the platform for traders and investors on Darwinex, comparable to how eToro caters to investors and self-directed traders on one platform.
- Investors get access to numerous tools on Darwinex when it comes to harnessing the power of crowdsourcing and social copy trading. However, since Darwinex does not yet support self-directed trading beyond its own strategies, traders must use MT4 or MT5 to choose from the range of forex and CFD options the broker offers.
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|Virtual Trading (Demo)||Yes|
|Desktop Platform (Windows)||Yes|
|Social Trading / Copy-Trading||Yes|
|MetaTrader 4 (MT4)||Yes|
|MetaTrader 5 (MT5)||Yes|
|Charting - Indicators / Studies (Total)||51|
|Charting - Drawing Tools (Total)||31|
|Charting - Trade From Chart||Yes|
|Watchlists - Total Fields||7|
|Order Type - Trailing Stop||Yes|
To score Customer Service, ForexBrokers.com partnered with customer experience research group Customerwise to conduct phone tests from locations throughout the UK. For our 2019 Review, 229 customer service tests were conducted over six weeks.
- Average Connection Time: <1 minute
- Average Net Promoter Score: 2.2 / 10
- Average Professionalism Score: 1.9 / 10
- Overall Score: 3.3 / 10
- Ranking: 22nd (23 brokers)
- View Infographic
Aside from copy trading research tools and occasional articles and news on the company’s blog, Darwinex does not provide traditional forex research.
- One of the key research tools the broker provides is the Darwinex platform itself as traders get access to a broad range of configurable parameters for sorting through the nearly 1,200 Darwin strategies (including closed strategies), where performance rankings can be broken down by various predefined and custom filters. The Darwinex score, for example, uses the firm’s proprietary ranking to gauge a strategy’s overall potential – where the higher the score is, the better.
- To analyze Darwins, custom filters, such as overall return, can be saved so users can screen for Darwins that only meet specific criteria.
- Little to no forex market research tools offered for self-directed forex trading.
|Daily Market Commentary||No|
|Forex News (Top-Tier Sources)||No|
|Trading Central (Recognia)||No|
|Social Trading / Copy-Trading||Yes|
|Social Sentiment - Currency Pairs||No|
Darwinex offers its own proprietary Darwinex mobile app for investors, as well as MetaTrader4 (MT4).
- The Darwinex mobile app has a modern look and feel, and offers user-friendly navigation options.
- While there is not a lot happening on the Darwinex mobile app, many of the key features from the web version are available, such as the ability to explore Darwin strategies and view a summary of open Darwin positions. You can also view historical performance data and rankings, including chart visuals for each strategy. These features are nestled away in the depths of the app, but are easily accessible.
- The Darwinex mobile app offers investors access to analysis tools for screening and managing open investments, including buying and selling Darwin strategies. However, it could provide a more comprehensive set of features usually found on mobile apps from forex brokers.
- For example, adding the functionality of self-directing trading would help boost the app’s usability, as MT4 and MT5 remains the only option for those wanting to trade from the list of forex pairs and CFDs available at Darwinex.
|Apple iOS App||Yes|
|Trading - Forex||Yes|
|Trading - CFDs||Yes|
|Alerts - Basic Fields||Yes|
|Watch List Syncing||No|
|Charting - Indicators / Studies||30|
|Charting - Draw Trend Lines||Yes|
|Charting - Trend Lines Moveable||No|
|Charting - Multiple Time Frames||Yes|
|Charting - Drawings Autosave||No|
Offering of Investments
The following table summarizes the different investment products available to Darwinex clients.
|Currency Pairs (Total Forex pairs)||39|
|CFDs - Total Offered||51|
|Cryptocurrency traded as actual||No|
|Cryptocurrency traded as CFD||Yes|
Each month the top 60 trading systems developers with the most consistent results become eligible for allocations from a pool of €4.5 million in notional funding that remains invested for a six-month period, as a further incentive for users to create successful Darwins and help them earn performance fees in return for positive results. This also means that at any given time Darwinex maintains a maximum of €27 million invested in Darwins that qualify to receive allocations.
The Darwinex platform permits users to upload back test files in .csv or HTML format from MT4, specifically to analyze simulated historical performance. However, only live account holders can submit their actual trading results to create a Darwin strategy. Closed strategies also appear in the database as useful points of reference, but are not investable.
Darwinex uses a Value-at-Risk (VaR) approach to calculate the maximum risk investors are willing to take, which serves as a guide when investors customize their investment preferences in their portfolios. A threshold percentage value is chosen (based on the client’s balance), and this takes into consideration the historical volatility of each strategy in the overall portfolio.
While slippage can occur and the resulting performance can vary between an investor’s account and the underlying strategy, Darwinex lists this tracking error as a divergence value within the platform, helping to make the process transparent.
In addition, Darwinex started publishing its execution statistics in order to provide greater transparency to its users.
Investors and traders are provided a range of tools to analyze and exchange more than 1,200 Darwins, while self-directed forex and CFD traders have access to MT4 and MT5.
With its competitive commission-based pricing and hedge fund style performance fees, Darwinex helps align successful traders with investors via its web-based platform. While traders can use conditional orders to trade Darwins, full self-directed forex and CFD trading remains segmented away in MetaTrader.
Thanks to its competitive pricing and execution offered through the firm’s FCA-regulated entity, Darwinex is a viable option for investors and experienced traders to commercialize their forex strategies.
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About the author: Steven Hatzakis Steven Hatzakis is the Global Director of Research for ForexBrokers.com. Steven previously served as an Editor for Finance Magnates, where he authored over 1,000 published articles about the online finance industry. Steven is an active fintech and crypto industry researcher and advises blockchain companies at the board level. Over the past 20 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.