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Darwinex Review

Steven Hatzakis

Steven Hatzakis | November 1st, 2019

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 66% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.

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.

Top Takeaways for 2019

After spending several hundred hours testing 28 forex brokers over six months for our third annual forex broker review, here are our top findings on Darwinex:

  • Founded in 2012, Darwinex is regulated by one tier-1 regulator, making it a safe broker (average-risk) to trade forex and CFDs with.
  • Darwinex is excellent for social copy trading and received our industry award for having the Best Trader Community. It's Darwin Exchange platform is easy to use and full of unique social trading features.
  • Darwinex is not an ideal choice for self-directed trading. To trade individual stocks and CFDs, you have to MetaTrader instead of the excellent proprietary Dukascopy platform, where pricing is higher, and no tools are available beyond the standard experience.
  • Darwinex provides terrible customer service. The broker finished 22nd (out of 23) in our national testing from locations across the United Kingdom.
  • Given the higher costs for MetaTrader, Darwinex is not a suitable choice for active or high-volume traders.

Overall Summary

FeatureDarwinex
Overall 3.5 Stars
Trust Score79
Offering of Investments 3 Stars
Commissions & Fees 4 Stars
Platform & Tools 3.5 Stars
Research 3 Stars
Mobile Trading 3 Stars
Customer Service 2.5 Stars
Education 3 Stars

Is Darwinex Safe?

help 79
Trust Score

Darwinex is considered average-risk, with an overall Trust Score of 79 out of 99. Darwinex is not publicly traded and does not operate a bank. Darwinex is authorised by one tier-1 regulator (high trust), zero tier-2 regulators (average trust), and zero tier-3 regulators (low trust). Darwinex is authorised by the following tier-1 regulator: Financial Conduct Authority (FCA). Learn more about Trust Score.

Regulations Comparison

FeatureDarwinex
Year Founded2012
Publicly Traded (Listed) No
Bank No
Tier-1 Licenses1
Tier-2 Licenses0
Tier-3 Licenses0
Trust Score79

Offering of Investments

Rank: 24th (of 28)

Darwinex provides traders access to a total of 306 instruments consisting of CFDs on ten indices, six metals, 244 US shares, five cryptocurrencies, and 41 forex pairs. The following table summarizes the different investment products available to Darwinex clients.

Offering Comparison

FeatureDarwinex
Forex: Spot Trading Yes
Currency Pairs (Total Forex pairs)41
CFDs - Total Offered265
Social Trading / Copy-Trading Yes
Cryptocurrency traded as actual No
Cryptocurrency traded as CFD 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. 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.

Base fees: 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 is equal to 5 units of the base currency you trade. For example, on the EUR/USD pair, the commission is denominated in euro, as that is the base currency. Therefore, a euro base pair will incur €2.5 charged per side for every 100,000 units traded (one standard lot), which equates to €5 per standard lot round turn (RT). Using the USD/JPY as an example, the RT commission is $5 per standard lot.

Slippage and execution: 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. Such metrics help make the research and investing process transparent at Darwinex. Darwinex also publishes its execution statistics to provide greater transparency to its users.

Darwin performance fee: For every subscribed strategy (Darwin), investors on Darwinex only pay a 20% quarterly performance fee if the performance of their subscribed strategy achieves a new high watermark. This fee, calculated by comparing any net new profits above a prior high, is comparable to the incentive fee structure of a hedge fund.

Performance discounts: Darwinex also offers talent-linked pricing, which is comparable to an active trader offering. With talent-linked pricing, trading costs drop when the performance realized by users surpass certain thresholds reflected in a higher D-Score ranking by Darwinex.

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Fees Comparison

FeatureDarwinex
Minimum Initial Deposit$500
Average Spread EUR/USD - StandardN/A
All-in Cost EUR/USD - ActiveN/A
Active Trader or VIP Discounts Yes

Platforms & Tools

Darwinex offers its proprietary software built solely for copy trading on the Darwin Exchange, alongside the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms for traditional self-directed forex and CFDs trading. This is a key difference from copy trading leader eToro, which caters to both investors and self-directed traders on one single platform.

Darwins: 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, 80 of the top-performing Darwins are eligible to receive allocations from a pool of five million of the firm’s capital.

Darwin Portfolios: Investors can also build portfolios consisting of Darwin strategies (there are more than 4,000) created by a trading system developer. Strategy creators share their strategies in the Darwin community via the available MetaTrader platforms, which connect to Darwinex.

€5 million pool: The top 80 trading system developers with the most consistent results become eligible for allocations from a pool of €5 million in notional funding each month from Darwinex. The distributions received by the 80 recipients remain invested in their respective strategies for six months. This funding structure acts as a further incentive for users to create successful Darwins and help them earn performance fees in return for positive results. Darwinex maintains a maximum of €30 million invested in Darwins that qualify to receive allocations.

Calculating maximum risk: Darwinex uses a Value-at-Risk (VaR) approach to calculate the maximum risk investors are willing to take. This math formula remains in the background 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.

MetaTrader: MetaTrader is also available for use by self-directed traders at Darwinex to access CFDs on 41 forex pairs, 244 single-stocks, ten indices, and six metals contracts and five cryptocurrencies.

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Research

Aside from excellent copy trading research tools and occasional articles and news on the company’s blog, Darwinex does not provide traditional forex research for self-directed trading.

Copy-trading research: One of the key research tools the broker provides is the Darwinex platform itself. Traders get access to a broad range of configurable parameters for sorting through over 2000 Darwin strategies (including closed Darwins) and can research performance rankings using predefined and custom filters, such as overall return. The Darwinex score, for example, uses the firm’s proprietary ranking to gauge a strategy’s global potential – where the higher the score is, the better.

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Mobile Trading

Darwinex offers its own proprietary Darwinex mobile app for investors, as well as MetaTrader4 (MT4).

Pros: The Darwinex mobile app has a modern look and feels and includes many of the crucial features of the web version. For example, the Darwinex mobile app provides users the ability to explore Darwin strategies and view a summary of open Darwin positions. You can also see historical performance data and rankings, including chart visuals for each strategy.

Cons: Darwinex mobile offers no ability functionality for traditional self-directing trading. For now, MT4 and MT5 remain the only option for those wanting to trade from the list of forex pairs and CFDs available at Darwinex.

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Customer Service

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.

Results

  • 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)

Final Thoughts

Thanks to its competitive pricing and execution offered through the firm’s FCA-regulated entity, along with £500,000 in supplemental insurance (beyond the £85,000 in coverage from the FCSC in the UK) Darwinex is a viable option for investors and experienced traders to invest in or commercialize forex strategies.

AboutDarwinex

Founded in 2012, Darwinex is regulated via its UK entity Tradeslide Trading Tech Limited, and passported throughout 31 EU-member states under MiFID regulation. Through its Darwin Exchange, Darwinex provides a unique approach to social copy trading. Darwinex users can trade strategies as financial assets based on their net asset value (NAV) indexed to 100. As a hybrid broker and asset manager, Darwinex currently manages nearly 36 million in assets.

Darwinex Trading Features

FeatureDarwinex
Virtual Trading (Demo) Yes
Proprietary Platform Yes
Desktop Platform (Windows) Yes
Web Platform Yes
Social Trading / Copy-Trading Yes
MetaTrader 4 (MT4) Yes
MetaTrader 5 (MT5) Yes
cTrader No
Charting - Indicators / Studies (Total)51
Charting - Drawing Tools (Total)31
Charting - Trade From Chart Yes
Watchlists - Total Fields7
Order Type - Trailing Stop Yes

Darwinex Research Features

FeatureDarwinex
Daily Market Commentary No
Forex News (Top-Tier Sources) No
Weekly Webinars Yes
AutoChartist No
Trading Central (Recognia) No
Delkos Research No
Social Sentiment - Currency Pairs No
Economic Calendar Yes

Darwinex Mobile App Features

FeatureDarwinex
Android App Yes
Apple iOS App Yes
Trading - Forex Yes
Trading - CFDs Yes
Alerts - Basic Fields Yes
Watch List Yes
Watch List Syncing No
Charting - Indicators / Studies30
Charting - Draw Trend Lines Yes
Charting - Trend Lines Moveable No
Charting - Multiple Time Frames Yes
Charting - Drawings Autosave No
Forex Calendar No

2019 Review Methodology

For our 2019 Forex Broker Review we assessed, rated, and ranked 28 international forex brokers over a six month time period. Each broker was graded on 81 different variables and, in total, over 60,000 words of research were produced.

While encouraged, broker participation was optional. Each broker had the opportunity to complete an in-depth data profile and provide executive time (live in person or over the web) for an annual update meeting.

All data submitted by brokers is hand-checked for accuracy. Ultimately, our rigorous data validation process yields an error rate of less than .1% each year, providing site visitors quality data they can trust. Learn more about how we test.

Forex Risk Disclaimer

"There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses." Learn more.


Steven Hatzakis

About the author: 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.

Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. All data was obtained from a published web site as of 02/18/2019 and is believed to be accurate, but is not guaranteed. The ForexBrokers.com staff is constantly working with its online broker representatives to obtain the latest data. If you believe any data listed above is inaccurate, please contact us using the link at the bottom of this page.

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