Why re-load Darwinex?

1 April 2017
The Market Owl

Hi there – and thanks for bearing with us for such a long time!

As you’ve noticed, the Darwin Exchange re-loaded overnight, so this post lays out what’s changed – but more importantly, WHY.

What changes?

A lot. The entire Darwinex team, in one way or another, shifted to “Re-loaded” from the 2016 summer break, and this is a large functionality release involving thousands of hours.

You’ll no doubt explore for yourself, but here’s a summary:

  1. Same ethos – new message: gone is “The Broker that invests in its traders”, long live “The Open Trader Exchange”. The new public site: explains why YOU!!! are an asset worth listing, and brings the journey that began with TradeSlide 5 years ago full circle
  2. New Algorithms: every algorithm has been re-programmed from the ground-up,
  3. New DARWINsevery DARWIN has been re-listed, with 10% VaR target risk and the new, generally less “intrusive”  risk manager,
  4. Private site: offers DARWIN providers & managers a faster, more intuitive and rewarding journey,
  5. Diversification rebates: whereby Darwinex subsidises healthy behaviour (diversification) and investor performance with a substantial chunk of Darwinex’s commission revenue

We think the wait was worth it – and sincerely hope you’ll agree! We’ll cover new functionality & algorithms in blog and webinar form in the coming weeks and months!

Is re-loaded stable?

We’ve tested for quite some time now (thank you, alpha testers!), but things won’t be perfect from day one.

With your help, we’ll get there faster: share your feedback in the community forum – every suggestion reaches the product & technology team via an internal Slack Channel. Hint: they work harder and faster if you share encouraging feedback from time to time…

But, enough intro. Why scrap the entire legacy interface?

Why re-load?

Darwinex, explained

From day one, defining Darwinex was a Challenge. Is it a broker? A social trading platform? A P2P asset manager? What “is” Darwinex?

Don’t get this wrong – from day one, we’ve been a movement where traders come first, and walked that talk for 5 years now. It started off as a trader diagnostic toolkit, with grades to tell skilled traders from lucky punters. Then we secured FCA Asset Manager permission2 years ahead of anyone else, and eventually became our own broker honing in on the best way to protect trader IP.

Today, in addition to receiving rave reviews as a broker (thank you, reviewers!), Darwinex is a venue that protects trader intellectual property, legally covering for traders to earn 20% success feefrom investors protected by a real time risk management engine.

Furthermore, because we believe in the movement, we actively risk our balance-sheet on as opposed to against customers. In our “first investor in traders” capacity, we’ve paid EUR 312.000 for trader IP to date (THANK YOU DARWIN providers!), and the current monthly Darwinia success fee run-rate is EUR 30.000.

It’s going well. Your word-of-mouth grows your movement 10+% per month logarithmic growth, without meaningful advertising spend… and yet: everyone struggled to describe above combination of features.

We labelled ourselves “the broker that backs its traders” – with friends providing honest feedback & literally thousands of suggestions on this note (thanks again 50, TradeSignalMachine, Klondike, ForexDuet, Krechendo and many others, sorry for only mentioning 5).

And then, eventually, it sank in. Darwinex has been all along, it’s just we didn’t realise …

The new Darwinex tag-line

The DARWIN Exchange is a 2-sided marketplace where:

  • Independent traders (DARWIN providers) legally market intellectual property
  • DARWIN managers (and DARWIN traders too!) allocate capital to said IP, at arm’s’ length, via a neutral venue…

On a first come, first served, level playing field.

Unlike proprietary trading operations, our (=YOUR) Exchange, is OPEN to anyone with thousands of dollars. This creates positive externalities. One of them is traders hailing from traditional assets learning to manage DARWINs to conquer a brand new asset. Imagine that. Traders managing DARWINs (=intellectual property) that other independent traders willingly and legally contribute. A crowd-sourced, crowd-funded movement collectively pooling information and capital for private, but also public benefit.

That’s what makes the movement different. Others want markets for themselves. The trader movement returns markets to society, for private, but also social profit.

So there you go. We hope the “Open Trader Exchange” tag-line helps YOU spread the movement. Yes, YOU, not just us – we’re all in this together: the sooner “retail trader” <> “brainless punter“, the sooner you’ll make a living from trading, because really, Darwinex is but the technology team at the service of the movement.

Note that it’s all a process – if you have a better one, please share!

Implications

Note the tag-line is about far more than PR. Because an Exchange is:

  1. Neutral: gone are judgement calls (Experience, Risk Management, etc.), in are fundamental trader DNA metrics (Ex = old Experience, Pf = legacy Performance, etc.).
    • 0-10 Grades remain, but YOU choose which ones to weight, how. Is R+ (Positive Return Consistency) meaningless to you? Ignore it! Lots of equity fund-managers consider Price Earnings Ratios useless… but respect the NYSE’s duty to track and publish them.
    • Levels (amoeba, Pro, etc.) are GONE from the interface. Note: we’re not giving up on them, just re-locating to a dedicated education effort, on which more when the time is ripe
  2. Transparent: more and more indicators will join the core set of metrics. The movement is publicly committed to beating the market, so we’ll publish in the coming months more information on how DARWIN providers & managers fare,
  3. Committed: Note that it’s an open exchange – so we will continue to back traders & expand proprietary investing activities in the coming months. Data suggests it’s possible to make money from the DARWIN asset and we’ll share how (techniques & tools), as we learn.

Hopefully that provides the gist of what’s coming – we’ll flesh this out in more blog posts / webinars / videos in the coming weeks/months, but please keep questions & challenge coming.

Algorithms

This is worth several posts in its own right. For now, a brief summary:

  1. Evolution: pretty much every algorithm has been re-factored from the ground up,
  2. Granularity: 6 grades morph into 12 elements, including all the old 0-10 sub-grades plus a new element called Market Correlation. We’re working on better (more intuitive, more to the point) videos to replace the old ones.
  3. Performance: computational performance has  dramatically improved. You’ll notice more frequent grade updates over time (although initially we’ll stay at daily until all code has been validated). This was a first step towards the next wave of functionality… on which more in due course,
  4. Stable & stored: we’ve started populating the world’s first public trader behaviour database. Guess what that could be used for…

Leave it at that for now: let’s say on the algorithm a lot of work has gone into building the foundations for our next product. Stay tuned.

Private site

We know. Remember when you first signed up to Darwinex? WTF? Where do I start? How do I open an account?

The legacy interface was designed for traders, and the more functionalities we added, the messier it got. It was complex before “investors” arrived. Launching the investor terminal completed a royal usability mess. Two separate interfaces with re-directs, lots of functionality, it all looked sort of pretty but it took commitment to do even the simplest things…

We know 🙁 Everyone back at movement Tech headquarters is hooked on an internal DARWIN portfolio Challenge – and because we privately use Darwinex as much or more than anyone else, WE were as frustrated as anyone. SO we took a step back to reflect… and the decision was made: scrap the whole thing, incorporate everyone’s feedback, and re-load for better:

  1. Responsiveness: a brand-new front-end framework, implemented with performance in mind. Gone are  endlessly loading scripts. Get there before forgetting what you’re after,
  2. Navigation: The left hand bar. Explore the catalogue. Zoom in on your first DARWIN. Discover what DARWINs others trade. Favourite DARWINs. Buy DARWINs from anywhere in the interface.
  3. Modularity: DARWIN providers & managers want different user journeys. From now on, everyone builds their personal Darwinex by simply activating different modules on THEIR left hand bar,
  4. Filtering: a much improved bar, top of the interface. Don’t search, find. DARWINs. Users. Strategies. Your call, not the search bar’s 🙂
  5. Control: portfolio performance, always at a glance, bottom of your screen. Click it, activate full screen view. Trade. Go back to hunting mode.
  6. Scalability: this was but a foundation for future evolution. The new framework will seamlessly include more and more powerful tools without unnecessarily adding complexity,

… and last, but not least, trade-ability. 

Want to guess the biggest insight from 1 year odd-year since”investor” platform launch?

DARWINs are NOT just for passive investors. Some users are experiencing DARWIN trading strategies – doing quite well out of it. Others are more “passive investors. It’s evolution itself: movement members  independently explore alternative investment strategies, and we’ll continue to observe and provide the most demanded functionality enhancements.

What comes next? We won’t give it away that just yet, but this hopefully gives you an idea…

Diversification rebates

Traders first: good traders are worth more Assets under Management.

Re-loaded introduces a new portfolio commission tier, whereby the more Darwins in a portfolio, the more trading commissions Darwinex rebates back to managers / investors.

Why? AuM are growing 10+% a month, organically, but nothing spreads faster than a better investment. Diversification rebates help DARWIN providers earn more success fees by leaving more profit with investors. On average across today’s portfolios, diversification rebates add 2-4% performance to yearly P&L. 

Our internal bet is that 1) diversification rebates plus 2) the improved risk manager plus 3) the steadily improving DARWIN pool will dramatically improve organic investor performance. Stay tuned.

What’s next?

That’s it for now!

Give us a bit of time as it’s all still a huge work in progress, but rest assured that there’s TONS of additional things in the oven.

For now, we need YOUR help. Please, please point our attention to any bugs you discover in the coming weeks  – this way we’ll quickly re-load to the next level.

Meanwhile, here’s a huge THANK YOU to all of you who constantly raise the level at the community forum, and a toast to even MORE evolution!