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What can a profitable trader expect from investors?

12 August 2016

A valued Darwinex trader e-mailed asking quite a while ago: what can a profitable trader expect from Darwinex?

I promised to answer on a blog-post – something I’ve failed to do for 5 months running …

Trader AuM (assets under management) now public

This post was so long in the making, in fact, that our functionality pipeline made the question redundant. Capital allocations are now public for prospective traders and investors.

The hope is for traders to quickly know where they stand in the investor pecking order.

Similarly, investors get the most aligned advice possible: what could be better than transparently seeing where everyone actually risks their bucks?

DARWIN AuM

Which means – this post is now redundant.

Or is it?

Investor sales: in whose job description?

And then it dawned on me that something else is going on. Please read on – I’ll make my point further down, but a bit of an intro is required.

Living off independent trader is all about trading consistently – e.g. grow personal capital and beat living costs. Repeat. Trouble is, trading assets in the tens / lower hundreds of thousands (e.g. you belong to 99% of man-kind), you can:

  1. Keep risk “reasonable”. Preserve capital, spending decades before you beat your living costs. Trade pea-nuts, make pea-nuts.
  2. Leverage pea-nuts 500:1 and pray it goes well. Except – this 99.99% guaranteed to fail. A pretty time and capital intensive road to nowhere 🙁
  3. Approach 1, managing investor alongside personal capital

Darwinex was founded by a trader who tried 1 & 2, and concluded that 3 was the only really viable option – but learnt first-hand that a “1-man asset manager” is 4 simultaneous full time jobs:

  1. Front office: Develop, implement & maintain a strategy that consistently beats the market – conditio sine qua none
  2. Sales: Attract investors without credibility (why would they believe that you really, really make money?)…
  3. Back-office: Service  existing investors – have you ever had to explain to an investor that yes, unfortunately drawdowns are part of trading?
  4. Compliance: Meet regulatory requirements – acquiring (and perhaps more importantly!) servicing a regulatory licence is both expensive and time consuming

Steps 3 & 4 are firmly on Darwinex’s plate. The DARWIN Exchange offers DARWIN Providers a regulatory and technological platform to focus solely on the trading.

Step 1 is strictly on the trader’s side. It’s a competitive (darwinian!) selection and there’s no investors if your trading sucks.

What about sales?

Well – sales could be teamwork. Darwinex is certainly investing time and money into technology to more efficiently source investors – and organic investor AuM are growing along. There are now 10+ strategies managing more than USD 200k / head – a modest number, but not bad considering the investor platform only went live early in 2016. In that sense, traders topping the filters that investors most care about (return, D-Score, etc.)  can expect 3rd party investor capital in the hundreds of thousands of USD.

Is that it?

Committed traders do better than “expect”

Yes: AuM numbers are not earth-shattering (yet). And here’s the news: they won’t be until the trader movement kick-starts the following virtuous circle:

  1. Investors win consistently, because…
  2. A steady supply of investable traders wins consistently

Taken as a whole, current investors are doing promisingly well – but the supply of investable traders on the platform remains thin. For this reason, in addition to further developing trader and investor technology, increasing the supply of investable traders will remain the core priority. Yes, there will be efforts done on the investor side (in addition to existing B2C traction, we are regularly approached by family offices and asset managers) – but investors won’t be as prioritised in the coming months in the same way that attracting traders will.

Put it another way: the reason why we’ll continue to grow Darwinia is that, for now, hundreds of thousands (not millions) are what you can expect from 3rd party investors.

But then again, if you have an investable strategy – you can already engage your friends and family circle to manage their monies via a regulatory & technologically sound set-up. If you’re genuinely good, you’ll stand head-and-shoulders among the trader community, who’ll give you the credibility you lacked to date.

Given that opportunity, if you’re really committed to making a living as a trader – is it really so smart to sit back expecting investors to arrive?

Have you told your friends that your evolution is now investable?

 

Last News
apalancamiento esma

NextEra Energy Stock Split 4:1

19 October 2020

The NextEra Energy stock split is approaching. At Darwinex we will apply the stock split on October 27th.

The NextEra Energy stock split is approaching. $NEE shares will be split 4-for-1. The number of shares will be multiplied by 4 and share prices divided by this same value.

At Darwinex we will apply the stock split on Tuesday October 27th at market open.

In live accounts we will adjust open position to the split without the need to close and reopen trades. Pending orders will be cancelled. In MT5, the hedged positions will be closed and the split will be applied to the resulting net position.

In demo accounts we will close all open positions in $NEE on Monday afternoon. Pending orders will be cancelled.

$NEE stocks will be available for trading from Tuesday, October 27th, at the post-split price.

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

End of Daylight Saving Time in Europe (October 25th 2020)

Please note that Daylight Saving Time (DST) ends in Europe on Sunday October 25th 2020 but our MT4 nd MT5 servers’ time is not changing until Sunday November 1st 2020 when DST ends in the US.

Please note that Daylight Saving Time (DST) ends in Europe on Sunday October 25th 2020 but our MT4 nd MT5 servers’ time is not changing until Sunday November 1st 2020 when DST ends in the US.

This means that there will be 1 week (October 25th through November 1st) where, for European users, most markets will open 1 hour earlier than during European DST, e.g. FX market will open at 21:04:01 GMT.

Instrument Trading Hours (GMT)
FX 21:05 Sun – 20:55 Fri (except 20:59:50 – 21:04:01 daily) 
DARWINS 21:05 Sun – 20:55 Fri (except 20:59 – 21:05 daily)
COMM.  
XAUUSD 22:01 Sun – 20:55 Fri (except 20:59 – 22:01 daily)
XAGUSD 22:00:01 Sun – 20:55 Fri (except 20:59:50 – 22:00:01 daily)
XTIUSD 22:00 Sun – 20:55 Fri (except 21:00:01 – 22:00 daily)
XNGUSD 22:00 Sun – 20:55 Fri (except 21:00:01 – 22:00 daily)
INDICES  
AUS200 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
STOXX50 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
FCHI40 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
GDAXI 01:30 – 21:00 (Mon – Fri)
SPA35 07:00 – 19:00 (Mon – Fri)
J225 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
UK100 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
SPX500 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
NDX 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
WS30 22:00 Sun – 20:55 Fri (except 21:00 – 22:00 daily)
US STOCKS 13:31 -19:59 (Mon – Fri)

As always, at info@darwinex.com we’ll be glad to assist you with any question you may have!

apalancamiento esma

Margin increase for EURGBP and EURJPY this Friday (Professional Clients)

14 October 2020

Our margin requirement for the EURGBP and EURJPY pairs for Professional Clients is changing this Friday, October 16th 2020, around 17:00 BST.

Our margin requirement for the EURGBP and EURJPY pairs for Professional Clients is changing this Friday, October 16th 2020, around 17:00 BST.

The measure is due to the recent increase in market volatility.

The new margin requirement will be 1% for both EURGBP and EURJPY, replacing the previous 0.5%.

It will remain in place until further notice and will affect both existing and new positions.

Kindly make sure you have enough available margin and equity in your account for the new margin level.

Need help? Please don’t hesitate to contact us at info@darwinex.com.

apalancamiento esma

Discontinuation of cryptocurrencies from 2021

15 September 2020

From 2021 Darwinex will no longer offer cryptocurrencies. As a first step, on Monday 21 September we will deactivate the creation of new accounts.

From 2021 Darwinex will no longer offer cryptocurrencies. Their low demand from our customer base does not justify the regulatory risk involved.

As a first step towards the discontinuation of cryptocurrencies, on Monday 21 September we will deactivate the creation of new accounts.

The cryptocurrency accounts already opened will be able to continue operating until the end of the year.

Amended Trading Hours U.S. Labor Day 2020

27 August 2020

Please note the amended Darwinex trading hours for the upcoming U.S. Labor Day on September 7th, 2020. All times are UTC.

Please note the amended Darwinex trading hours for the upcoming U.S. Labor Day on September 7th, 2020. All times are UTC.

Labor Day 2020

For your convenience:

– Normal DARWIN trading hours

– Normal FX/CFD trading hours

– Annual Calendar of Amended Darwinex Trading Hours

Apple And Tesla Stock Splits

25 August 2020

Tesla’s and Apple’s stock splits are approaching. As of August 31st, Tesla shares will be split 5-for-1, and Apple’s 4-for-1. Existing shares of each company will be multiplied by 5 and 4, respectively, and their share prices divided by those same values. At Darwinex we will apply the stock split on the weekend of August […]

Tesla’s and Apple’s stock splits are approaching. As of August 31st, Tesla shares will be split 5-for-1, and Apple’s 4-for-1. Existing shares of each company will be multiplied by 5 and 4, respectively, and their share prices divided by those same values.

At Darwinex we will apply the stock split on the weekend of August 29th.

In live accounts we will adjust open positions in $AAPL and $TSLA to the split without the need to close and reopen trades. Pending orders will be cancelled.

In demo accounts, however, we will close all open positions in $AAPL and $TSLA on Friday afternoon. Pending orders will be cancelled.

Both $AAPL and $TSLA will be available for trading from Monday, August 31st, at post-split prices.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. -- % of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.