Darwinex Review – Our Independent, Technical and Professional Opinion
Looking for a Darwinex review that’s professional, technical and above all honest?
Want to figure out whether Darwinex is a good broker, and especially if is good for you?
Then you are in the right place.
In this Darwinex review we’ll provide in the first place an explanation of how this Social Trading broker works.
But not only.
Here’s what you’ll discover in this review:
- Our opinions on Darwinex
- Its strengths
- Its weaknesses
- Any dangers
- For who is best suited
All this, always with a technical and professional approach but explained in easy terms.
No false promises, no bait and switch. Only technical opinions based on our professional experience.
Let’s start now.
Darwinex is the commercial name of Tradeslide Trading Tech Ltd. This company, founded in 2012 by Juan Colón Bolea, CEO and co-founder, and Javier Colon Bolea, trader and co-founder, provides brokerage and asset management services.
Darwinex is authorized and regulated by the Financial Conduct Authority (FCA) in the UK, with FRN 586,466. The fact that it is a company regulated by the FCA implies a periodic review of their solvency, of their internal procedures, of how they manage data and the funds of their clients and of the of the personnel qualification level.
They also have a MiFID passport to provide their services in all EU countries. The regulation and the duty to fight money laundering prevents it from providing services to the citizens of the countries where this is against the local laws and regulations. As an example: United States, Japan, North Korea, Sudan, Syria or the Islamic Republic of Iran.
In addition to providing an excellent brokering service for all the traders who want to operate in the markets, this company also provides investors with the possibility to replicate the transactions of professional traders.
After a first phase of beta-testing, Darwinex officially opened the doors to investors on 9 December 2015.
Darwinex review: the new frontier of Copy Investing
The signals replication service offered by Darwinex is different from the one of a normal Social or Copy Trading company. As a matter of fact, the social aspect is pratically absent, contrary to what happens with other competitors like eToro and ZuluTrade.
Darwinex is characterized by protection policies for the intellectual property of the trader’s strategy, advocated mainly by the co-founder and trader Javier Colón Bolea.
With Darwinex you can replicate the performance of the trader with a service very similar to copy trading, but, given this protection policy, the interactions with the trader and the visibility of his transactions in the market are excluded, so much to redefine the concept of Social Trading in Social Investing, or, even better, Copy Investing (term coined by InvestinGoal for this Darwinex Review, it stems from the fact that there is no social aspect but only copying, then “copy”, and you can’t see the trading operations, but it’s more like an investment in a fund, as we will see shortly, then “copy investing”).
In order to manage the risk and protect intellectual property of its traders, Darwinex introduces the concept of Darwin. In essence, the investors who want to invest with this company will replicate the strategy of traders buying or selling Darwins.
What are the Darwins are and how they work
Darwins, an acronym for Dynamic Asset and Risk Weighted Investment, are synthetic financial assets. They are synthetic because their value doesn’t result from market course but from the trader strategy.
We can imagine a Darwin as a closed black box, where the Trader performs his own trading strategy. You can see the box, but you cannot see what’s inside and what is being done. In other words, you cannot see what the trader does, but you can choose to invest money in his Darwin to replicate his performance.
The Darwins are priced initially with a value of 100, and this value will increase or decrease depending on the operational performance of the strategy. The Darwin price value is updated every 30 seconds.
The investor who decides to replicate the trader’s strategy actually will do so through the purchase of the Darwin connected to it. Therefore, in the investor’s account we will not see replicated the long or short positions on stocks, currencies, indexes or commodities, but only Darwins with their respective prices.
From the analysis and selection of the trader perspective, the investor doesn’t have therefore the possibility to analyze in detail the traders’ strategies, but he has at his disposal a series of judgments and merit scores created by Darwinex concerned with the experience, the level of risk, the skill and the safety of the trader, and the possibility to analyze the performance of the Darwin which is reflecting the performance of the strategy applied by the trader.
The focus of this company is definitely on investor protection. When the trader performs his strategy within the Darwin, it is closely monitored and, when situations of over-exposure arise, restricted by algorithms according to fixed limits imposed by Darwinex. In practice, the trader can even open a position with an out of the norm leverage, but what will be replicated by the investor through the Darwin will be an operation with leverage and exposure never beyond a certain limit. The same applies also in case of extreme volatility. If this were to burst, causing sudden and dangerous overexposures, Darwinex will limit the damage by closing partially or totally your positions.
From one point of view, once you understand some not immediate basic concepts, the Darwinex system may be easier for novice investors.
Despite this, we believe that the depth of detail on the strategy, which aims to understand the logic that led the trader to make certain decisions at certain times of the market, is priceless, allowing the evolved investor to fully understand whether the trader reflects or not his risk-return idea and can coexist within a people-based portfolio.
Using Darwins as fund shares
To shed more light on the functioning of Darwins, we could compare them to fund shares.
A fund is a container of capital managed by a manager (the fund manager indeed), who uses a stated (usually) investment strategy to operate in the markets with the aim of maximizing returns and, in many cases (especially among the older funds), replicating or beating a benchmark.
The investor who invests in a fund will not hold in his portfolio the securities underlying the fund, the financial instruments purchased by the manager (stocks, bonds, etc), but only his slice of the fund share, the price of which will increase or decrease depending on the skill of the fund manager in making right market choices that will lead to an appreciation of the fund and therefore the share value of the investor.
With a very similar concept, the investor holding Darwins will not have within his deposit the assets underlying the trading strategy, but he will hold an amount of Darwins equal to the capital invested on them, and his gain will be determined by an appreciation of these, which will occur only in the event that the trading strategy connected to the Darwin will be successful.
The two primary purposes of the Darwins
The Darwin has several objectives, but two are the fundamental:
- Protecting the intellectual property of the trader’s strategy. As we mentioned earlier, one of the Darwinex founders is a trader, for this reason probably this company is particularly attentive to the intellectual property of the trading strategy. According to their logic, protecting the intellectual property of the trading strategies could do nothing but attract professional traders within Darwinex, driven by the possibility to achieve extra returns without jeopardizing the intellectual property of their investment process. Darwinex still provides a detailed description of the performance of the Darwin, with several indicators that are mostly Darwinex judgment systems on the quality and experience of the trader. It is therefore not absolutely possible to see the details of the trader’s transactions.
- Managing Risk/Reward levels. Darwinex, through the use of algorithms of its property, automatically modulates the risk of the trader strategy. Should it become, for various reasons, more risky, the Darwin connected to the strategy would not replicate the transaction, or it would replicate it with a lower leverage. Darwinex, then, modulates the replication of operating signals from the Darwin to maintain a Var (Value at Risk) of max 20% per month (with a 95% reliability). The Var corresponds to the monthly average fluctuation, upward or downward, of the financial instrument. A value of 20% is comparable to the average fluctuation of a share of the S&P 500.
How To Start the Copy Investing with Darwinex
Starting to invest with Darwinex is very simple, and obviously it all starts with a first deposit.
Minimum deposit to invest with Darwinex and future withdrawals
To start working with Darwinex the minimum deposit is 500 EUR / USD / GBP, which becomes 10,000 EUR / USD / GBP in case of corporate accounts. The minimum is applied only to the first deposit, no minimum amounts are required for subsequent deposits or withdrawals.
The minimum investment you can make for each single Darwin is 200 EUR / USD / GBP, while the maximum is 25,000 EUR / USD / GBP.
Regardless of the deposit method used, the withdrawals of the deposited funds, or the profits made, can be made by bank transfer to a bank account registered by the same holder of the Darwinex account.
With regard to UnionPay deposits, they may also be collected on the same UnionPay account, but only up to the same amount as the amount deposited using this service.
If, however, a card was used for the deposit, a withdrawal can be made on the same card from which the funds have been deposited, and always up to the same amount as the one deposited through the same card. This procedure should be evaluated by Darwinex, which grants it only in special cases.
Under no circumstances will it be possible to withdraw the profits through the card.
It is important to note that the maximum deposit allowed through the card is 5,000 EUR / USD / GBP. This amount is intended per person, and for all his life, and this is why Darwinex advises to use this method only in cases where a rapid payment is required.
Minimum and Maximum investment per Darwin
The minimum investment that can be made for each single Darwin is 200 EUR / USD / GBP.
Subsequent minimum investments on Darwin are 25 EUR / USD / GBP. This value also corresponds to the minimum disinvestment allowed, but only until the amount invested on the Darwin remains above 200 EUR / USD / GBP. When you reach the threshold of 200, you have to sell the entire amount to close the investment.
The maximum allowed investment for single Darwin is 100,000 EUR / USD / GBP. However, if the investor is interested in investing more, Darwinex will be willing to evaluate the case.
Darwinex Score to find the best Darwin
The choice of Darwin on which to invest can be facilitated through the analysis of the Darwinex Score, which is nothing but a merit score provided by Darwinex which, through its proprietary algorithms, analyzes the trader’s strategy.
Specifically, 12 Attributes contribute to the determination of the Darwinex Score, which are:
- MARKET CORRELATION;
- RISK STABILITY;
- RISK ADJUSTMENT;
- OPEN STRATEGY;
- CLOSE STRATEGY;
- POSITIVE RETURN CONSISTENCY;
- NEGATIVE RETURN CONSISTENCY;
- DURATION CONSISTENCY;
- LOSS AVERSION;
The Dawinex Score gives Darwin a rating from 0 to 120. Obviously, the higher the score and the better.
Using filters to find the best Darwins
Another way to go hunt for the best Darwins can be to use the search filters. Filters are nothing but pre-configured search parameters created by Darwinex through its notorious algorithms. Specifically, the Darwinex filters are:
- TOP INVESTED;
- GOOD SCORES;
- RETURN > 50%;
- ON FIRE;
- COMMUNITY DARWIN.
In the EXPLORE section, all the Darwins are already grouped according to each filter, while in the All DARWINs section, searches can be made by combining these filters, scraping Darwin further. For example, you can search Top Invested with Good Scores and a Return> 50%. Customizing your searches will help you find the right Darwin for your portfolio.
Once found some interesting Darwins to buy, you will be able to analyze the underlying operation in more detail using the trader profile provided by Darwinex. This card provides a very high depth of analysis, but always keeping the trader’s strategy (and therefore the intellectual property) protected. Here you will be able to analyze:
- RISK RETURN;
- ASSET & TIME FRAME;
- INVESTABLE ATTRIBUTES;
- UNDERLYNG STRATEGY.
For each of these items you can find charts and values that can help you understand whether the trader’s operating style suits your objectives or not.
Buying and Selling Darwins, the Revolution of Conditional Orders
Once you have found the Darwins you are interested in, unlike other copy trading companies, here you do not have to start following the trader, seeing positions opening and closing on your account on each financial instruments, but you just have to buy the Darwin. If the trader behind Darwin will work well, then the Darwin’s value will rise and it’ll make you win, nothing simpler.
Thanks to this simplification and the introduction of conditioned orders, you now have several possible portfolio management scenarios.
1. Classic Approach
If you don’t have much time to follow the investment (and maybe neither skills and experience), the advice is to do simple things, determining the capital to invest on the Darwin and buying it at market price.
At this point, you will keep your position (and therefore your investment) by following its daily / weekly evolution, and deciding from time to time whether to move your capital to new Darwins, remove some from your portfolio, or increase existing ones.
This is really the simplest strategy.
2. Classical approach with Stop Loss parachute
A small but crucial piece can be added to the simple strategy we have seen above for the tranquillity of the investor’s portfolio.
With the introduction of conditional orders, the investor can set up, for each purchased Darwin, an automatic sell in the event that the asset loses a certain value. This type of setting helps protect the capital invested on single Darwin from a more or less sudden depreciation.
Here’s how, by setting a banal as effective stop loss, the investor can protect his investment.
3. Evolved Approach by Using Conditional Orders
With the introduction of conditional orders, it is possible to revolutionize all the Darwin’s entry and exit strategies, entering into position through a buy limit or buy stop orders, and exiting from positions in stop loss or take profit.
It is therefore an activity that can be compared to speculative trading (but made on Darwin assets), with the possibility to create more complex and perhaps even more profitable investment strategies.
Training with a Darwinex Demo Account
Darwinex also provides a Demo access (virtual money) that turns off automatically if not used for more than thirty days.
The goal is clearly to let the investor becoming familiar with the instruments for his investment activities. The demo platform correctly and faithfully replicates the services to which the user will have access with real money, with the exception of slippage, a factor not present in the demo platform, contrary to reality.
Darwinex cost for investors
To use the Copy Investing service of Darwinex investors pay two types of fees:
- The Trading Fee in % on the trading volume (we will see its entity in the next paragraph);
- The Success Fee calculated on a quarterly basis, equal to 20% of the profits made, net of trading fees.
Investing with Darwinex – Becoming a Signal or Strategy Provider
The Darwinex platform for investors is very accurate and easy to use, as is its trading service. While being a reality created to provide a Copy Investing service, Darwinex also provides an excellent retails trading brokerage service.
In this way, it can attract many high-level traders.
Through Darwinex you can negotiate 34 among the most liquid currency pairs, 9 indexes and 6 commodities. To operate on indexes and commodities you can do it through CFD (Contract For Difference).
It is a STP broker, which means that it provides its investors the same quotations provided by its liquidity providers, without applying any markup, which is why the bid-ask spreads are really thin(except in times of extreme volatility or market tension) and for most of the time they are below 1 pip. The gain for the brokerage activity is achieved by applying a fee of 0.0025% of the nominal value traded.
This is certainly a distinctive element, considering that normally brokers that offer social trading services have generally very large spreads, about 3 pips (of course in this case the spread is smaller but you pay a fee for a brokerage service definitely of high level).
The Swap rates are fixed daily by their liquidity providers and also these are forwarded directly to investors without markup.
Trading activity is made possible by the use of the most popular platform in the world with regard to forex trading, the MT4, with a maximum leverage of 200.
Contrary to what you can read from other sources, Darwinex DOES NOT support the cTrader platform, a platform usually made available by many ECN STP brokers and that has the value of giving access to the depth of the market allowing a high speed of execution.
Despite this, its service remains absolutely of high quality.
For all traders who use VPS to operate with automated trading systems, Darwinex optimizes the experience by facilitating access to the BeeksFX platform, with discounted prices. This platform is connected to their servers to Equinix LD-4k, this reduces and eventually eliminates the latencies between the VPS service and their LP (Liquidity Provider, in this case LMAX).
Becoming a Signal or Strategy Provider with Darwinex
If you want to trade normally (so without being tracked or copied) of course you can do it, but if you want to become a Signal or Strategy Provider, then you have to associate your strategy with a DARWIN.
There are two ways to own a live Darwinex MT4 account:
- Open a new MT4 live account with Darwinex, and start trading from scratch;
- Migrate your trading history obtained by working with another broker in a live Darwinex MT4 account. Other brokers’ accounts are not suitable for creating DARWIN. Your linked account must first be migrated to be eligible.
Once you’ve got a live Darwinex MT4 account, you will have to meet all of the following criteria in order to be able to see the “Create DARWIN” button on the strategy analysis page:
- The strategy experience score must be at least 0.5. As long as the experience score will be below this threshold, you will see the % of progress needed to reach it;
- 31 days at least must pass between the first and last trade on the account;
- More than 50% of trades must have a duration of at least 10 minutes.
After you press the ‘Create DARWIN’ button, the DARWIN will NOT be created immediately, but it will be priced on the following weekend, when the market is closed, and approved by the Darwinex staff by Monday/Tuesday afterwards.
Darwinex Mobile App
Since October 2016, Darwinex has created a full set of mobile apps that allow users to manage their trading account through their mobile phones.
Investors will be able to check account performance and buy or sell DARWIN simply by installing the “Darwinex For Investors” app, compatible with iOS and Android systems. For traders, just install the mt4 app that will allow you to operate on markets with the appropriate Darwinex configuration.
Darwinex Support and Education
Another distinctive feature of Darwinex is definitely the effort they’ve put into the training section and in the support provided to the clientele.
With a copy trading service so innovative, so much to deserve a brand new term, i.e. Copy Investing (conied by us), we must recognize they have explained it in a really effective and detailed manner.
Thanks to attention Darwinex has put in the education aspect, we can say the investor will hardly have any doubts about how to start and what to expect from the service.
In the Education section, available from the left part of the personal account control panel, there is a large amount of informative material, detailed and well done. You can find the classic FAQs to deal with:
- Frequently Asked Questions About Rules
- Basic information
- Trader information
- Investor information
Always among the FAQs you can find an important detail on the algorithms applied by Darwinex within the Darwin tabs. Last but not least, a section devoted to the DarwiniA Trading Challenge.
Also Webinars are present, usually welcome webinars, at least one per week and in different timeslots.
The video section contains very interesting info (the videos are in English and Spanish). Usually videos cover the most important and most recurring topic, giving answers to the typical doubts of those who approach this new world and want to start investing.
Support, though only in English and Spanish, is ready and effective, reachable by telephone and email. There is also a mini PDF guide of two pages that shows what to do in an emergency.
DarwiniA: the Darwinex trading contest
The Darwinia is a monthly contest that rewards the best Darwinex trader. Every month 400,000 Euros are assigned to the top 16 traders for a period of 6 months, during which those traders receive the famous Success fee of 20%. The monthly winners are identified based on their D-score (a score given by Darwinex) for their monthly trading activity and, of course, for their monthly returns. This contest aims to encourage traders to operate well, to achieve substantial capital to manage and make themselves visible. In the site, in fact, there is an entire section devoted to the contest which highlights the winners, giving also the possibility for investors to evaluate their strategies and include them in their portfolios.
- Want to become a Darwinex trader and partecipate to the Darwinia contest?
- Or do you want to become an investor and exploit this new Copy Investing opportunity?
Start by opening Now your Demo or Real account! Click here!