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Social trading – Is it a free for all?

14 February 2014

Committed traders spend thousands of hours absorbing, processing and acting on market information. “Social” empowers them to post, receive, and thus exchange information, 24*7 with others around the globe.

P2P is THE new paradigm. Unsurprisingly, traders have embraced P2P with gusto.

Social and traders: isn’t this exciting? How about Social trading / Copy-trading / Auto-trading / Mirror trading??

Here’s our take! (Hint: knowing that trading is Intellectual Property, you won’t be surprised!)

Social trading & collaboration

Trades are a time sensitive IP produced by hard to acquire trading skills: knowing a good trader’s current market outlook, or the trade that he just placed is VERY valuable information.

On this account, “social” holds promise. Trading rooms & clusters of “Twitter traders” have formed on a validated psychology principle: group beats individual decision-making. Your information helps me; my information helps you, it’s a win-win, “social trading” here we go!

Collaboration is everything in social trading

 

 

 

 

 

 

Almost, but not quite!

Social trading = free for all?

There’s this tiny little thing: for this to work, my contribution has to be as valuable to you as your contribution is valuable to me.

Otherwise, imagine this conversation between Trader Johnnie and George “Quantum” Soros in 1992. Johnnie, who just placed his first ever trade, reaches out: “Hey George, I’m a trader, you’re a trader, let’s social trade: I’m long the GBP, any thoughts?”.

Absurd, and therefore unlikely! Animal Farm’s unforgettable Napoleon summed it up:

Animal Farm and social trading

 

 

 

“All traders are equal, but some trades are more equal than others”

 

 

 

Free “Social trading” as described above = barter. Barter works… AS LONG AS all parties to it exchange equally valuable contributions.

Luckily for George, trading is an IP industry: no amount of Johnnie trades are of interest to George (this is not to say that knowing ALL trades by ALL Johnnies at any point in time wouldn’t!). Barter and IP are difficult soul-mates: a sustained IP exchange where a trader consistently contributes above average only works if he really likes philanthropy: the communist trader – a very strange creature, indeed!

Social trading – our take

“Social trading” would work IF all traders had similarly valuable IP to contribute. But they don’t. The moment a trader contributes more than he gets, his incentive is to walk. Once he does, the second best trader, who also contributed above average and now also lost access to the best trader’s IP, follows suit. This triggers a race to the bottom that soon becomes noise. At its worst, this is Twitter for traders. Everyone has trades to tweet, alas not all trades are equally valuable.

Social trading – what’s next?

Barter is not the way to exchange valuable information: this ignores the dynamics of intellectual property. Existing “social trading” propositions fall short on this account and thus have flaws that greatly outweigh their benefits to good traders. What’s worse, they’re a self-selection magnet for all sorts of bad stuff that smart traders should best stay away from. Groucho Marx knew when he said: “I wouldn’t join a club that admitted me as a member!”

At Darwinex, we know that, given the right set-up, good traders have valuable IP to contribute, and can benefit from collaboration. Our investor platform is already in private beta, so stay tuned!

 

Last News

Darwinex amended trading hours (US Independence Day)

29 June 2017

Please note the amended Darwinex trading hours for the upcoming US Independence Day holiday on 3 & 4 July 2017 (all times are in UK time).  Instrument 3 July 2017 (Mon) 4 July 2017 (Tue)  FX 22:05 Sun – 22:00 Mon 22:05 Mon – 22:00 Tue   DARWINS 22:05 Sun – 22:00 Mon 22:05 Mon – 22:00 Tue   COMMODITIES […]

Please note the amended Darwinex trading hours for the upcoming US Independence Day holiday on 3 & 4 July 2017 (all times are in UK time).

 Instrument 3 July 2017 (Mon) 4 July 2017 (Tue)
 FX 22:05 Sun – 22:00 Mon 22:05 Mon – 22:00 Tue
  DARWINS 22:05 Sun – 22:00 Mon 22:05 Mon – 22:00 Tue
 

COMMODITIES

   
Gold* 23:01 Sun – 21:59 Mon 23:01 Mon – 18:00 Tue
Silver* 23:00 Sun – 22:00 Mon 23:00 Mon – 18:00 Tue
Platinum* 23:00 Sun – 22:00 Mon 23:00 Mon – 18:00 Tue
Palladium* 23:00 Sun – 22:00 Mon 23:00 Mon – 18:00 Tue
US Crude* 23:00 Sun – 22:00 Mon 23:00 Mon – 17:45 Tue
Natural Gas* 23:00 Sun – 22:00 Mon 23:00 Mon – 17:45 Tue
 

 INDICES

 
Australia 200 23:00 Sun – 22:00 Mon 23:00 Mon – 22:00 Tue
 Europe 50 23:00 Sun – 22:00 Mon 23:00 Mon – 22:00 Tue
France 40 23:00 Sun – 22:00 Mon 23:00 Mon – 22:00 Tue
Germany 30 07:00m – 21:00 07:00m – 21:00
Spain 35 07:00m – 19:00 07:00m – 19:00
Japan 225* 23:00 Sun – 18:15 Mon 23:00 Mon – 18:00 Tue
 UK 100 23:00 Sun – 22:00 Mon 23:00 Mon – 22:00 Tue
 US SPX 500* 23:00 Sun – 18:15 Mon  23:00 Mon – 18:00 Tue
 US Tech 100* 23:00 Sun – 18:15 Mon  23:00 Mon – 18:00 Tue
Wall Street 30* 23:00 Sun – 18:15 Mon  23:00 Mon – 18:00 Tue
*Amended Darwinex trading hours.

 

As always, at info@darwinex.com we’ll be happy to assist you!

High volatility expected due to RBNZ Interest Rate decision today

21 June 2017

The Reserve Bank of New Zealand is releasing its Interest Rate Decision today (21 June 2017) at 21:00 GMT. As you may recall, trading is disabled from 20:59:59 to 21:01:00 GMT due to the low liquidity available on rollover, so please bear in mind that you won’t be able to open / close trades from […]

The Reserve Bank of New Zealand is releasing its Interest Rate Decision today (21 June 2017) at 21:00 GMT.

As you may recall, trading is disabled from 20:59:59 to 21:01:00 GMT due to the low liquidity available on rollover, so please bear in mind that you won’t be able to open / close trades from 20:59:59 to 21:01:00 GMT during this volatile news release.

When setting your SL / TP, kindly note that large gaps are expected when trading resumes at 21:01:00 GMT.

Please do not hesitate to contact us at info@darwinex.com should you need assistance.

Darwinex at Forex Day 2017

19 June 2017

In what is becoming a tradition, this year we again were in attendance at The ForexDay on 9th-10th June in Madrid. As in previous years, the event lasted for two days: on the first day (Friday 9th June), the organisers gave a trading course (for a fee) which ended with an international trading contest. On […]

In what is becoming a tradition, this year we again were in attendance at The ForexDay on 9th-10th June in Madrid.

As in previous years, the event lasted for two days: on the first day (Friday 9th June), the organisers gave a trading course (for a fee) which ended with an international trading contest. On the second day (Saturday 10th June), there were presentations about trading on two stages in the Official College of Architexts in Madrid, Spain (you can see the event programme here).

International trading contest (9th June)

This year, the international trading contest participants were Rob Hoffman, Davide Biocchi and Tarek Elmarhri. As well as being a great trader, Tarek is the Darwinex Ambassador for France, so you can imagine who we were rooting for…and as the good trader that he is there are no prizes for guessing who won 😉

And the winner is… Tarek, of course!You can see an interview with Tarek here (apologies for the poor sound quality).

General Public Event (10th June)

On Saturday, at 9 am, the doors opened for the general public event.  As in previous years, we were surprised by the amount of people queuing at the door to attend the event.  From Darwinex we want to congratulate the organisers for how well everything turned out.

The Trading Conferences soon got underway on the stages, including the conference that we had prepared.

Darwinex Conference (Expo Stage)

At 12.30 am the first Darwinex conference took place: ‘Independent trader experiences – their day-to-day trading’, in the which Mallku, Riddick and Mimago shared their experiences as traders (with their proven track records).

Mallku, Riddick and Mimago on stage

 

As can be seen in the photos, the room was filled to capacity… we actually had to leave the stage without answering all the questions so the next speakers did not run out of time! You can see a video of the conference here (NB: the conference starts at 2:19.40).

At Darwinex, we wish to thank all those in attendance because it was a pleasure to have you all there!

Darwinex Conference (International  Stage)

Following on the success of the conference in the Expo Stage, we then held another Darwinex Conference in the Sala Panorámica. As the in previous conference, the theme was ‘Independent trader experiences – their day-to-day trading’. This time the guest speakers were Integracore2, VPSEnry, ChicksFX and Mallku. Once again the Conference was a success and many of those in the audience approached out stand to ask us about Darwinex, DARWINs, DarwinIA, etc.

You can watch a recording of the conference here.

Also, you can watch interview carried out by ForexDay with some of the participants on their Youtube channel.

Event Highlights

Having come this far, it is fair to say that the event was a success: Tarek won the international trading contest, the conferences offered by our traders filled to capacity both halls (the conferences ended up with standing room only due to such a high attendance!)

Nevertheless, this does not explain why the event was such a big success for us: what really put such a big smile on our faces that day was all the traders and investors that visited us at our stand: as well as Mallku, Riddick, Mimago, Integracore2, VPSEnry and ChicksFX, who were in attendance as guest speakers, we had the enormous please of speaking with Yofxtrader, ElQuantitativo, Chema01, MCFD, Pedroml and GlobalMarkets, amongst many others. We offer you all our most sincere thanks. We attended ForexDay in 2013 as guest and we never could have imagined the amount of great traders (and great people) that would end up becoming part of this traders’ movement a few years later… and the best is yet to come!

SEE YOU NEXT TIME!

PS: According to our friends the best part of the day were the post-event drinks! 

Volatility expected due to UK general election

7 June 2017

Please note that high volatility is expected on GBP, EUR, CHF pairs as well as on UK and European indices on Thursday (8 June 2017) due to the UK general election. Also, liquidity providers are expected to significantly limit their liquidity, which can give rise to abnormal widening of spreads, potential increased amounts of slippage on executed orders and, eventually, […]

Please note that high volatility is expected on GBP, EUR, CHF pairs as well as on UK and European indices on Thursday (8 June 2017) due to the UK general election. Also, liquidity providers are expected to significantly limit their liquidity, which can give rise to abnormal widening of spreads, potential increased amounts of slippage on executed orders and, eventually, gaps in the charts due to the low liquidity available. If you plan to keep open trades on Thursday, please make sure you post margin / equity in your account ahead as volatility is expected to increase, especially around market close at 22:00 (UK time) on Thursday.

We reserve the right to change our margin requirements as we move closer to the election / depending on the outcome. Should we decide to introduce any changes to our trading conditions, we’ll endeavour to contact you via email, MT4 or by changes made to our blog / website ASAP.

D-Leverage & Risk Manager

Further, our Risk Manager will be more restrictive when replicating DARWINS’ trades to protect investors from increased volatility owed to the election.

As always, please do not hesitate to contact us at info@darwinex.com for support.

And the DarwinIA winners are…

5 June 2017

The May edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000 notional allocation for a 6 month period. Place DARWIN May’s notional allocation 1st XIN € 300,000.00 2nd GTD € 250,000.00 3rd DZT € 210,000.00 4th WEF € 170,000.00 5th KVL € 150,000.00 6th PUZ € […]

The May edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000 notional allocation for a 6 month period.

Place DARWIN May’s notional allocation
1st XIN € 300,000.00
2nd GTD € 250,000.00
3rd DZT € 210,000.00
4th WEF € 170,000.00
5th KVL € 150,000.00
6th PUZ € 140,000.00
7th SVI € 130,000.00
8th ERQ € 120,000.00
9th NTI € 110,000.00
10th TOP € 110,000.00
11th OLT € 110,000.00
12th LVS € 100,000.00
13th RWL € 100,000.00
14th VTJ € 100,000.00
15th CLA € 90,000.00
16th VQG € 90,000.00
17th STM € 90,000.00
18th YMK € 80,000.00
19th THA € 80,000.00
20th MLS € 80,000.00
21st YHN € 70,000.00
22nd FTA € 70,000.00
23rd WZG € 70,000.00
24th FCQ € 70,000.00
25th SSS € 60,000.00
26th MDI € 60,000.00
27th VLR € 60,000.00
28th NND € 60,000.00
29th QNR € 60,000.00
30th OPK € 60,000.00
31st UEI € 50,000.00
32nd JMW € 50,000.00
33rd KDU € 50,000.00
34th FTT € 50,000.00
35th DLF € 50,000.00
36th VHI € 50,000.00
37th RSR € 50,000.00
38th XGU € 40,000.00
39th VFL € 40,000.00
40th WPQ € 40,000.00
41st VQB € 40,000.00
42nd FGC € 40,000.00
43rd XXW € 40,000.00
44th CSP € 40,000.00
45th MRV € 30,000.00
46th XYP € 30,000.00
47th PFH € 30,000.00
48th RQH € 30,000.00

Darwinex Trading Hours for ucomping Bank Holiday in Australia (12 June 2017)

Please note the amended Darwinex trading hours for the upcoming Bank Holiday in Australia on 12 June 2017 (all times are in UK time).  Instrument Trading Hours  FX 22:05 Sun – 22:00 Mon   DARWINS 22:05 Sun – 22:00 Mon  COMMODITIES   Gold 23:00 Sun – 22:00 Mon Silver 23:00 Sun – 22:00 Mon Platinum 23:00 Sun – 22:00 Mon Palladium 23:00 Sun – 22:00 Mon US Crude 23:00 […]

Please note the amended Darwinex trading hours for the upcoming Bank Holiday in Australia on 12 June 2017 (all times are in UK time).

 Instrument Trading Hours
 FX 22:05 Sun – 22:00 Mon
  DARWINS 22:05 Sun – 22:00 Mon
 COMMODITIES  
Gold 23:00 Sun – 22:00 Mon
Silver 23:00 Sun – 22:00 Mon
Platinum 23:00 Sun – 22:00 Mon
Palladium 23:00 Sun – 22:00 Mon
US Crude 23:00 Sun – 22:00 Mon
Natural Gas 23:00 Sun – 22:00 Mon
 INDICES  
Australia 200* 08:10 – 22:00
 Europe 50 23:00 Sun – 22:00 Mon
France 40 23:00 Sun – 22:00 Mon
Germany 30 07:00 – 21:00
Spain 35 08:00 – 19:00
Japan 225 23:00 Sun – 22:00 Mon
 UK 100 23:00 Sun – 22:00 Mon
 US SPX 500 23:00 Sun – 22:00 Mon
 US Tech 100 23:00 Sun – 22:00 Mon
Wall Street 30 23:00 Sun – 22:00 Mon
*Amended Darwinex trading hours.

As always, at info@darwinex.com we’ll be happy to assist you!