Darwinex

Discussion in 'Brokers' started by rod178, Jan 1, 2015.

  1. rod178

    rod178 Well-Known Member

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    The Darwinex new business offer seems interesting and operates is somewhat different to the usual PAMM.

    Basically a 'successful' Trader's performance can be 'marketed' (survival of the fittest) and 'Investors' can 'buy' access to the Trader performance - via copy trades which are immediately placed in the market by Darwinex, for a quarterly performance fee(15% of profit for the Trader,5% for Darwinex, remaining 85% for the Investor), after spreads and commissions, which are very competitive.

    Good explanation is via 50s Blog discussion https://www.youtube.com/watch?v=vJK2yRrd2GA

    some Darwinex links, FAQs etc
    https://www.darwinex.com/en/help/faq/?group=darwinex-broker

    https://www.darwinex.com/en/help/faq/?group=darwinexchange

    https://www.darwinex.com/en/help/faq/?group=darwin-provider

    https://www.darwinex.com/en/

    https://www.darwinex.com/en/paymentsconditions

    https://www.darwinex.com/en/executionconditions

    http://www.donnaforex.com/forum/index.php?PHPSESSID=rh29d49gbtkjgt546tt7bspuf4&topic=12945.30

    http://en.wikipedia.org/wiki/Darwinex

    http://socialtradingguru.com/networks/darwinex
     
  2. joepippin

    joepippin Well-Known Member

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    I recently talked to someone who proposed. 70% to the trader 30% to the investor as long as they traded certain risk parameters.
     
  3. jack

    jack Administrator Staff Member

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    That's a really bad cut if you are fronting the risk.

    I don't know Darwinex or the specifics of their business, but even top end hedge funds only get a 20% performance take.
     
  4. joepippin

    joepippin Well-Known Member

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    Yeah thats what I thought too but top hedge funds require huge deposits. Excess of 10million? Does the split change if say you were only given 50k as a start?
     
  5. rod178

    rod178 Well-Known Member

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    The business model seems very different, although still early days, so far as evaluating Darwinex.
     
  6. rod178

    rod178 Well-Known Member

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    In the case of the Investor that is the same cut as Darwinex, after spreads and commissions ie 5%+15% = 20%
     
  7. garry

    garry the art of war

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    i charge 30% of profits high water mark month by month ,that seems average with my experience
     
  8. rod178

    rod178 Well-Known Member

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    average does not mean that it is good deal for the Investor, especially that the high water mark profits are calculated month by month.
     
  9. garry

    garry the art of war

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    for sure depends how good the trader is ,30% is a standard average of profit share across the board
     
  10. rod178

    rod178 Well-Known Member

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    If they are good then for 30% they should be willing to carry forward their loss months. And 'pigs fly' ?
     
  11. Ignacio

    Ignacio Member

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    Hi guys, I work at Darwinex and couldn't avoid jumping into the discussion. I hope you don't mind!

    On top of the performance fee, Darwinex's business model provides legal coverage to traders. As you may know, most traders manage investors' capital without being properly regulated, which makes their strategies not scalable (most attract only family & friends' capital to avoid legal issues).

    Also, you are not considering the costs of bringing investors in. The good thing about Darwinex is that we bring you the investors. All you have to worry about is trading. So, 20 % vs. 30 % is not that relevant if you compare the number of investors you can attract yourself vs. the number of investors a regulated asset manager can bring you. You'll probably agree that 15 % of 1000 investors is better than 30 % of 10 investors.

    Sorry for jumping in, guys, feel free to reach out to me for any question you may have!

    Happy New Year,
    Ignacio
     
  12. garry

    garry the art of war

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    Most clients really don’t care if you underperform a benchmark for a year or two. As a general rule, they just want to know that a steady hand is on the tiller and that you’re guarding their money like it’s your own.
    and your on time and dont break your word .
     
  13. rod178

    rod178 Well-Known Member

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    Trust is an 'interesting' concept when the management of money is concerned.

    Basically I only trust 'me', and that is probably a delusion as well.
     
  14. jack

    jack Administrator Staff Member

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    Hello and welcome to the forum! :)

    We are ok with vendors around these parts so long as they only act in a customer service capacity (like answering questions directed to them, etc..) and do not post promotional material. So your jumping in was fine.
     
  15. jack

    jack Administrator Staff Member

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    That said, I'm still kinda tilting my head about Darwinex's profit split. I'm just hashing it against other backer/trader type relationships and there's quite a difference.

    In the hedge fund world, capital introductions get a cut of the allocation up front and sometimes there's a rider component as well.. but these aren't huge numbers.. Expensive for the fund, yes, but the investor only sees the typical '2 and 20'. Sometimes I hear of one-off agreements citing a 30% cut, such as another poster mentioned in this thread, but that might be given no management fee is charged.

    In the prop trading world, where a firm fully backs the trader (not a depository or contribution based firm, but a traditional prop,) we see a huge variety of compensation methods.. but again, the person or entity fronting the downside risk commands a good portion of the profits, and the "legal and compliance"/backoffice work sees but only a fraction of it all.

    I have to ask.. what exactly is in it for the investor? What is the investor getting for Darwinex taking up just as much of the profit as the "talent"?
     
  16. Computater707

    Computater707 Well-Known Member

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    Welcome Ignacio - I have a question. Can a USA resident and citizen participate in Darwinex as either an investor or trader?

    I expect the answer to be no, but it never hurts to ask.

    Happy new year to you also
     
  17. rod178

    rod178 Well-Known Member

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    I remember reading on the Darwinex website that they do not accept US residents.

    Whatever happened to the concept 'Land of the Free....' ?
     
  18. rod178

    rod178 Well-Known Member

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    My understanding is that 'Talent', ie Trader, gets 15% and Darwinex 5%

    Seems like a good deal for the Trader. Whether or not it is a good deal for the 'Investor' would, I suppose, depend upon them being able to 'hook on' to a Trader with long term consistent positive results. My concern as an Investor would always be the fact that quarterly losses are not carried forward.
     
  19. jack

    jack Administrator Staff Member

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    Ohhhh... You know what? I had that mixed up. For whatever reason I misread the profit split and I thought that Darwinex got 30%, the trader got 30%, and the investor was getting the shaft by fronting the risk and getting less than half the upside.

    Entirely a misunderstanding on my end.

    If it's an 80/20 split with the 20 being divided between Darwinex and the trader, that's right in line with my expectations and what's typically considered fair.
     
  20. jack

    jack Administrator Staff Member

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    https://www.darwinex.com/en/traderrevenues


    Yeah, This makes much more sense.
     

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