How traders’ trades get replicated for investors (13)

11 October 2018
The Market Owl

In previous episodes we talked about how liquidity aggregation works at Darwinex, how our incentives are to always get you the best price and how we are a pure broker and not a market maker.

In this episode we talk about the process by which traders’ trades get replicated for investors in traders’ DARWIN.


Fundamentals of DARWIN investing

Register for this webinar if you want to master the basics of DARWIN investing.


After touching upon some basics – both traders and their followers/investors trade with our with FCA regulated brokerage, followers replicate, but do NOT know, underlying trades thus cannot bypass payment of 20% success fee of the trader – we discuss the following:

  • Sequence of the replica process.
  • Divergence (difference between leader & replica price).
  • Capacity of the trading strategy to get replicated bu investors – the more market liquidity you take, the more you move market price against you).

Every strategy gets to a point where it can’t take more capital. That’s when it’s reached full capacity.

In the case of news trading in retail, it’s tens / hundreds of thousands before liquidity providers refuse to price either you or your broker.

Or we can go all the way up to Bridgewater Associates, Renaissance Technologies etc., given that some of the biggest asset managers stop accepting new investors. As a matter of fact, some of them have even STOPPED accepting investors altogether!

In this episode, you’ll be also able to understand:

  • How we measure capacity.
  • How we provide traders with choices when managing their DARWIN’s capacity.
  • How traders can make the most of the market, i.e. encounter te optimal debt vs. capital mix (how much leverage do you borrow to boost return on your own capital and how much investor capital is ideal to top things off on the above).

Listen to the episode


Fundamentals of DARWIN investing

Register for this webinar if you want to master the basics of DARWIN investing.