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Overall

Darwin Exchange (Darwinex) is an innovative social copy-trading broker that helps match investors with nearly 1,200 trader-developed strategies that are traded like securities (ticker symbols) on the Darwinex platform. The broker also caters to self-directed forex and CFD traders by offering MT4.

By Steven Hatzakis / April 3rd, 2018 / Updated: August 15th, 2018

help 81
Trust Score
Dislikes
  • Self-directed trading only on MT4
  • Narrow list of forex pairs
  • Limited range of traditional research tools
  • Strategies geared more towards longer-term investing (passive)

Review Sections:

Founded in 2012, Darwinex established its office in London and obtained authorization in 2013 via its FCA-regulated entity, Tradeslide Trading Tech Limited, which is pass-ported throughout the EU under MiFID. Darwinex evolved from an asset manager into also offering brokerage services and execution as a dealer with a limited license as a matched principal, which permits it to offer agency execution (non-dealing desk) by using third-party dealers.

Fast-forward to 2018 and Darwin Exchange (Darwinex) today 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 MetaTrader 4 (MT4) platform, which is also used by self-directed traders to access 40 forex pairs, 10 indices, and six metals contracts.

Trust Score

Trading with a forex broker that traders can trust is crucial to success. Forex fraud and scams are,

Trading with a forex broker traders can trust is crucial to success. Unfortunately, forex fraud and scams are common in the industry.

Here at ForexBrokers.com, we maintain the largest independent regulatory database available on the web. Using 28 different variables, we have created a proprietary 1-100 score (the higher the better) of overall trustworthiness, which we call the Trust Score. Here is our trust summary of Darwinex.

Darwinex
Trust Score81
Year Founded2012
Publicly-Traded Company (Listed) No
Regulated in Major Hub Yes
Regulated in Emerging Hub No
Authorised in the European Union Yes
CFTC Registered (USA) No
FCA Regulated (UK) Yes
IIROC Authorised (Canada) No
FINMA Authorised (Switzerland) No
ASIC Authorised (Australia) No
SFC Authorised (Hong Kong) No
MAS Authorised (Singapore) No
FSA Authorised (Japan) No
FMA Authorised (New Zealand) No
CySEC Authorised (Cyprus) No

Offering of Investments

The following table summarizes the different investment products available to Darwinex clients.

Darwinex
Minimum Initial Deposit$500
Currency Pairs (Total Forex pairs)40
CFDs - Total Offered16
Exchange Traded Securities: US No
Exchange Traded Securities: International No
Cryptocurrency traded as actual No
Cryptocurrency traded as CFD No

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.

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.

Darwinex_Live_spreads_November_22_11:58:46am

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. For more about Darwinex spreads see our full commissions notes at the bottom of the page.

Darwinex
Average Spread EUR/USD - StandardN/A
All-in Cost EUR/USD - ActiveN/A
Active Trader or Premium/VIP Yes

Customer Service

For our 2018 Forex Review, 129 customer service phone tests were conducted over three months. The data collected is institutional grade. On average, three questions were asked for each test. To score each test, the tests were divided into three separate groups and scores were given for the time taken to connect with each support representative and the ability of each representative to professionally (and thoroughly) answer each question. A Net Promoter Score was also given for the overall experience.

Results:

  • Average Connection Time: <1 minute
  • Average Net Promoter Score: 7 / 10
  • Average Professionalism Score: 6.2 / 10
  • Overall Score: 7.2 / 10
  • Ranking: 14th (43 brokers)

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.

Darwinex web platform screener

Aside from these investor research tools and occasional articles and news on the company’s blog, Darwinex does not provide traditional research, which limits its overall ranking as a broker for self-directed traders.

Darwinex
Daily Market Commentary No
Forex News (Top-Tier Sources) No
AutoChartist No
Trading Central (Recognia) No
Delkos Research No
Acuity Trading No
Social Trading / Copy-Trading Yes
Social Sentiment - Currency Pairs No
Client Webinars Yes
Client Webinars (Archived) Yes
Videos - Beginner Trading Videos Yes
Economic Calendar Yes
Calendar Includes Forecasts No
Economic News Sentiment No
Trade Ideas - Backtesting Yes

Platforms & Tools

Darwinex offers two trading platforms, its own proprietary software and the popular MetaTrader 4 (MT4) platform. To learn more about MT4, read our guide to MetaTrader. For this review, I focused on using the Darwinex platform, which comes as a web-based and mobile app.

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 four million Euros. This information is made transparent for all investors so anyone can participate by investing alongside these featured money managers.

Darwinex_IA

The portfolio section shows the combined performance of all Darwin holdings, and further reporting is found across additional tabs, ranging from rebates to historical positions.

It is easy to analyze the historical performance of a particular Darwin strategy and there are multiple tabs for further analysis.

Darwinex platform reporting

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.

That said, Darwinex recently implemented conditional orders, which means that beyond just investing in Darwins, users can now start to trade them using tools usually found on self-directed trading platforms.

Conditional orders is one example of Darwinex starting to bridge the gap between investing and actively trading Darwins on its platform.

Darwinex web portfolio

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.

Overall, 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 to choose from the range of forex and CFD options the broker offers.

Darwinex
Virtual Trading (Demo) Yes
Desktop Platform (Windows) Yes
Desktop Platform (Mac) No
Web Platform Yes
Social Trading / Copy-Trading Yes
Proprietary Yes
MetaTrader4 (MT4) Yes
MetaTrader5 (MT5) No
cTrader No
Currenex No
ZuluTrade No
MirrorTrader No
Charting - Drawing Tools (Total)31
Charting - Indicators / Studies (Total)51
Watchlists - Total Fields7
Order Type - Trailing Stop Yes

Mobile Trading

Darwinex offers its own proprietary Darwinex mobile app for investors, as well as the popular MetaTrader4 (MT4) mobile app developed by MetaQuotes Software Corp. To read more about MT4, see our guide to MetaTrader. For this review, I focused on the Darwinex mobile app that is available for both iOS and Android.

The Darwinex mobile app has a modern look and feel, and offers user-friendly navigation options.

Darwinex mobile app screener

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.

Darwinex mobile app Darwin stats

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 remains the only option for those wanting to trade from the list of forex pairs and CFDs available at Darwinex.


Darwinex
Android App Yes
Apple iOS App Yes
Charting - Draw Trend Lines Yes
Charting - Can Turn Horizontally Yes
Charting - Technical Studies/Indicators30
Watch List Syncing No
Trading - Forex Yes
Trading - CFDs Yes
Alerts - Basic Fields Yes

Other Notes

Each month the trading system’s developers with the most consistent results become eligible for allocations from a pool of €4 million in notional funding, as a further incentive for users to create successful Darwins and help them earn performance fees in return for positive results.

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.

Darwinex web value at risk tolerance

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 an effort to provide greater transparency to its users.

Final Thoughts

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.

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 it is a positive step for Darwinex to implement conditional orders for traders to trade Darwins, full self-directed forex and CFD trading remains segmented away in MT4.

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 strategies.

Methodology

For our 2018 Forex Broker Review we assessed, rated, and ranked 43 international forex brokers. Each FX broker was graded on 140 variables. Learn more.

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

Reviewed by 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 19 years, Steven has held numerous positions within the international forex markets, from writing to consulting to serving as a registered commodity futures representative.

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Ratings Overall

Summary

Commissions & Fees
Offering of Investments
Platforms & Tools
Research
Customer Service
Mobile Trading
Education

Best in Class

2018
25 of 43

Overall
  • Social Copy Trading

Commissions & Fees

Commission Notes

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).

The tiered levels at which users are eligible for rebates of a portion of the monthly commissions they pay are shown in the excerpt from Darwinex below.

Darwinex commission discount


Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All data was obtained from a published web site as of 4/03/2018 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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