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Darwinex Review

Steven Hatzakis

Steven Hatzakis | September 16th, 2019

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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.

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.

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. 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.

Review Summary

Rank: 22nd (of 28)

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.

Benefits

  • Darwin Exchange provides a unique community for copy traders.
  • Offers talent-linked pricing discounts to reward talented traders by reducing their trading costs.
  • Provides advanced API functionatlity and open-source algorithmic trading tools for connecting MetaTrader strategies to the Darwinex platform.

Considerations

  • Narrow list of forex pairs for self-directed trading.
  • Limited range of traditional research tools.
  • Poor quality customer service.

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

Commissions & Fees

Rank: 15th (of 28)

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.

Benefits

  • For every subscribed strategy, 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.
  • Darwinex also offers talent-linked pricing, which is comparable to an active trader offering. With talent-linked pricing, discounts are provided when the performance realized by users surpass certain thresholds reflected in a higher D-Score ranking by Darwinex.

Considerations

  • 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.
  • 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.

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Further Reading

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

Rank: 15th (of 28)

Darwinex offers its own proprietary software (for copy trading on the Darwin Exchange) alongside the popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms.

Benefits

  • 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 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.

Considerations

  • 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. Therefore, beyond investing in Darwins, MetaTrader is the only option for self-directed traders at Darwinex.
  • 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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Further Reading

Tools Comparison

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

Customer Service

Rank: 22nd (of 28)

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)
  • View Infographic

Research

Rank: 23rd (of 28)

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

Benefits

  • 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 strategies), and can research performance rankings using 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.

Considerations

  • Little to no forex market research tools offered for self-directed forex trading.

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Further Reading

Research Comparison

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

Mobile Trading

Rank: 22nd (of 28)

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

Benefits

  • 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. 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 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.

Considerations

  • 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.
  • Adding the functionality of self-directing trading would help boost the mobile app’s usability. 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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Further Reading

Mobile Apps Comparison

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

Offering of Investments

Rank: 24th (of 28)

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
Cryptocurrency traded as actual No
Cryptocurrency traded as CFD Yes

Other Notes

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 allocations received by the 80 recipients remain invested in their respective strategies for six months. This funding structure acts 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.

The Darwinex platform permits users to upload files in .csv or HTML format from MT4, specifically to backtest and 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. 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.

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.

Also, Darwinex publishes its execution statistics to provide greater transparency to its users.

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Final Thoughts

Rank: 22nd (of 28)

Investors and traders can access a range of tools to analyze and exchange more than 4000 Darwins, while self-directed forex and CFD traders have access to over 300 symbols on 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, 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.

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 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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