Alternatives to Darwinex

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Gargamel

Active member
180 349
Addition to previous post:
1)Traders must invest in wikifolio at least 5k € or CHF to get label 'Real money' for their wikifolio (547 wikifolios with that label at the moment)
2)Traders don' get all Performance fee they earned during a year,but only a portion of it.Depending on amount of investments in their wikifolio.After more than 125k is invested in their wikifolio,they get 50% of Performance fee and that is Max. :cry:.So even if trader demands 30% fee from investors,he can get only 15 % .And than there is a 19% German VAT tax applied🤣.
3) They have also a category of wikifolio managers who are specialized in investments in other wikifolios.Those Portfolio Managers get fixed 10% of performance fees in successful wikifolios contained in portfolio-so part of 'stolen' performance fees from traders can go to Portfolio managers.
4)part of 'stolen fees' from traders is apparently used to cover transaction costs of investors in wikifolio and to prevent Divergence from trader's results in his account,if I understand the scheme correctly
 
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CavaliereVerde

Established member
678 987
So if we suppose a max performance fee of 30% the trader gets a max of 15%.
It is not more convenient than Darwinex and it is more an alternative to eToro, stockpicking without a serious desktop trading platform and no automated trading.
 

Gargamel

Active member
180 349
So if we suppose a max performance fee of 30% the trader gets a max of 15%.
It is not more convenient than Darwinex and it is more an alternative to eToro, stockpicking without a serious desktop trading platform and no automated trading.
Well,as I added 4) in my post part of 'stolen fees' finances prevention of Divergence.That is important so investors get what they see and not like at THA darwin where they feel cheated because of divergence.
But this whole set-up is another incentive for traders to push for max. Return to compensate for low % of fees.If normal fee there is around 12% and trader gets 6% at best and VAT eats away another 1%,they are very interested to produce 50 -100% Return per year or more.Very bad environment.
 
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Viro Major

Well-known member
343 267
And than there is a 19% German VAT tax applied🤣
Talking about taxes, this morning, it looks like Darwinex made a move to become compliant.

B19506F5-4580-4151-A167-2C4AFEB864AA.jpeg


Why wouldn’t you pay taxes even on performance fees collected ? I mean, it’s a service provided to Darwinex. In a way, it’s actual work
 

Gargamel

Active member
180 349
I was laughing because of VAT applied,not taxes in general.I don't like taxes on taxes.
 
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Sterso7

Junior member
42 69
On the Topic of Wikifolio, there are a few things that haven't been mentioned. Mainly the Risk side.
So let me get to it. I'm german and live in Germany. I first tried out Wikifolio way back in 2015, because it was
a very cool "concept" something new and exciting. Gargamel has been so kind to give a little overview.

Plattform:
Wikifolio has it's own interface which is rather simplistic, Traders do not trade with their own Capital, it's
basically demo Money! In order to get the "real Money" Badge a trader has to invest 5k and send wikifolio
their Brokerage statement of the Investment in said wikifolio. This process, back then, had to be repeated every
3 Months. Now I won't go any further. So back to the Plattform, as you can see from my Screenshot, a trader can
only buy structured products from HSBC, L&S (will get in to that later) and Socgen. I don't have to tell any of you
what the implications are of such "products". Wikifolio more often than not, has major difficulties with high Vol. days.
Orders can't be submitted, plattfrom is not accesable, Spreads are insane and so on. So all in all from a trading stand point I give it a 3 out of 10.

Regulatory:
This is probably the main issue with investing in Wikifolio. Lang & Schwarz (L&S) is basically their "Market Maker", they handle nearly everything from IPO, CP Managment, Regulatory issues etc. The main Issue I personally have with Wikifolio,
due to the fact that Wikifolios can be bought on exchanges (Stuttgart or L&S) and have an ISIN it sort of gives of the vibe
of a tangible asset class (very often these wikiofolios are premiered in Handelsblatt). But it is not, the buyer of said wikfolio. as with all derivatives has a title against L&S. So if L&S where to go Bankrupt (which is not unlikely) an Investor loses his Investment.

Summary:
I've always said, the basic concept (IPO's, real exchange, PIB's and KiDs) of wikifolio is good, but not refined. It works well for them and the potential glory hunters. Revenue split is a hassle, but overall the negatives (from a trading standpoint) outway the positives. In its current form it is by no way an alternative. If I had the time and financial backing I would create something similar, more accesible, easy on the eye but with "real" products (Futures, Options, Stocks, Forex), proper Risk Management, no phoney trackrecord farming, Demo accounts and so on. But that is easier said than done. As of now I have alot of ideas but lack the Industry background.
 

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CavaliereVerde

Established member
678 987
I was very impressed by the lenght of the trackrecords, than I noticed that the majority are backtests.
High returns are also in the backtested part.
Only the last 3-4 years yellow-green part is significant.
 
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Gargamel

Active member
180 349
eToro offers nothing to traders:
-bad trading conditions,bad reputation and unstable prospects for AuM,
Last week I took a closer look at new eToro set-up:since 2015 new Popular Investor (trader) programme with incentives to act responsibly and with look at long-term success for trader and copiers(investors) and since August 2020 normalized trading conditions for FX (before it was really silly-spread on E/U 3 pips for example).

It is still a jungle with only minor Risk management-traders that breach very generous Risk level 7 are stopped from being copied,while in eToro Portfolio programme they are much more severe and 5% DD is enough to be dropped out of portfolio.
Basically the system is geared towards psychological incentives to behave responsibly-like Ayondo platform tried and failed,while Darwinex invested into Risk-management algos to protect investors.
eToro stands a chance to actually succeed as Retail investment platform because they have secured big AuM for traders with their aggressive marketing campaigns and thus incentive is there to behave properly,BUT majority of that AuM is Dumb money.That means to get noticed trader must chase max.% and must be very active or all time in the market.That brings predictable cycle of rapid popularity of some traders when they get discovered by crowd and then slow or fast dissipation of AuM when trader doesn't live up to unrealistic expectations and ridiculously short attention span of such investors.
I did find a few conservative traders with solid following,so there is a hope for long-term success.But majority of stars are very risky stock-pickers and crypto traders.

Very interesting feature is that investors don't pay any performance fees and that makes great incentive to push that 'Copy' button.They pay only trading spreads like chosen trader.That means company is paying Popular Investor rewards out of its pocket.For 'Red star' traders it is fixed monthly sum of 400-800 USD,while 'green and black star' traders get 1,5-2,5% (yearly)of AuM invested in them on yearly average AuM or something like that.That means there is no incentive to push for max.Return.But,Catch 22 is trader must push for max. Return to get noticed in the first place.Than he must continue to perform on high level or Dumb money goes looking for next Holy Grail...
The 'blue star' traders- novices accepted into programme and vast majority of other users don't get anything for being copied ;) .
Another twist is 'skin in the game' feature:blue star traders need at least 1k trading capital,red star traders 5k,green star traders 25k and black star traders 50k trading capital.If that is not met trader cannot progress into higher tier and thus his max.AuM and rewards are limited to his tier.The serious AuM starts with 'green star' tier: above 500k,but trader needs to post 25 k in his trading account to become eligible and get some noticeable income from his activity.For poor traders it is a bit too much.But I like the idea in general.Trader and copiers are trading with same risk!

Also scalping is not allowed and can get trader banned altogether.Algo traders are not welcome.Trading platform is only one(no MT4/5) and made for stock pickers and swing fx traders.No migrations of trackrecords allowed.Broker is bucket shop.
Traders that are accepted into Popular Investor programme(starting as blue star and getting no rewards) must post their photo for everyone to see and their real name and country of residence.
There are at the moment 45 traders with more than 1 Mil.AuM.

For illustration purposes I borrowed a table made by one eToro user in Autumn 2019 about Elite Investors(green and black star traders at that time). That is significant because today eToro in its marketing materials is pointing out 29% average yearly profit in 2019 for 50 most invested traders.
How it works:Dumb money is making those green and black star traders continuously by posting AuM to them and ruining them(they lose their star status) by withdrawing AuM for whatever reason. So there are always half of elite traders on their way out for daring to go into DD that lasts a while or even stagnating for several months in a row.And there is half of fresh Holy Grail traders with abnormal recent gains,But while first group was invested for a while,second group just got invested and thus those elevated Returns were not pocketed by majority of copiers.The only entity making money consistently is broker of course.
ATH stands for all time high.Yellow traders went bankrupt or retired during previous 12 months.In left column traders in red are those with more than 12 months since ATH.Exactly half of them;).Green are those at ATH .
In right column we can see how far were traders in % from their ATH.

Screenshot_2020-12-04 Most invested50 at eToro.png


Basically 'red star' traders are eToro equivalent of Darwinia.They get 400-800 USD monthly while they are still in that tier.No other rewards.But they must trade with at least 5k capital and maintain above 50k AuM and at least 10 active copiers on average.
Peculiarities : everything is in USD although broker and customers are in EU.
UK customers are under UK regulatory regime and everybody else under Cyprus regime.
There is 1 Mil. deposit insurance for customers of both branches.Most represented country for customers and Elite traders is UK,while there is not much activity in this forum about eToro.
Company claims 14-15 mil. registered customers but there are less than 800K public, verified accounts,many of them inactive.They are getting more and more customers from Middle East and SE Asia.Big growth potential.Also now with normalized Fx trading conditions they might get much more customers from Eastern Europe than now is the case.
 

CavaliereVerde

Established member
678 987
Company claims 14-15 mil. registered customers but there are less than 800K public,
It is a bit like 200k users of this forum... :ROFLMAO:
Many investors have a private profile and by the way even 800k is an impressive number.
eToro makes much more sense for a copier/investor than for a trader.
 
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Gargamel

Active member
180 349
Addendum:there are 1309 Popular Investors(PI) in programme.
5 black stars with more than 10 Mil.AuM
42 green stars with 500K-10 Mil. AuM
around 200 red stars with 50-500k AuM
other 1000 PI's don't get any rewards for being copied.
Green star traders must sign an exclusivity contract with company or their payments are blocked.
Black star traders must be financial professionals or accumulate 3 years track-record in the programme.
Company staff is monitoring via weekly video-calls the mental state of green/black star traders to make sure they are OK.They also have Personal account managers and various perks.
 

Viro Major

Well-known member
343 267
8A303078-A155-4C18-84E7-2DFB00B99FFD.jpeg


This is a trading (not social) company that understands perfectly well what people want ! Finally....

I’ve spent more time diving into all the services ran by Dukascopy, which is an exhaustive list and really takes some time because their numerous websites (trading, bank and crypto) are very dense in offers.
Honestly, I believe it’s the company I saw who understands the most their client base, wishes and needs. I’m very surprised at how quick they release features that are spot on up to showing accurate expertise and talks to broad or niche audiences the same. Uktimately, it’s a perfect partner and right now I have no complaints.

So now, I have many accounts with them (still 0 with Darwinex but soon enough in January)
* 5 trading ones, including 1 which has a XAU base currency for transparent investment also when flat, and 2 USD ones which accept Bitcoin and Ethereum deposits and withdrawals (so practical)
* their managed fund account
* the binary one which I don’t care too much about if at all, but the interface is very neat again and the best I’ve seen in that field
* one swiss multi-currency bank account, where the card is tied to and will also serve to touch financial rewards for participating at 2 of their cryptocurrency programs. Acquiring DUK+ coins soon which will pay up to 70% in DUK+ per year or about 15-30% in EUR. But my aim is to join the liquidity rebate pool program and touch a share of 1% of the commissions generated by the broker at the global level. The interests touched will be lower at about 10%-15% (for now) but fluctuating over time based on adoption, but I believe in the long run it might pay of as the smartest move

Their management interfaces are so slick, clean and clear, I’m amazed how they planned everything ! The leadership just knows what they do and how to nest stuff
There is just too much good stuff to dig out about this broker. Can’t explain it all
 
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Viro Major

Well-known member
343 267
Something rare, Dukascopy doesn’t require to respect the close loop policy : funds deposited by card can be withdrawn by wire transfer... and vice-versa. That can save on fees since wire transfer withdrawals are a fixed fee but card deposits accommodate for speed

You can even deposit using 3rd party payment methods to the bank account before transfering to trading account. Talk about unseen convenience...
D1CC7E7C-832A-44AE-86F9-929B9F8633AE.jpeg

More than a gimmick, the card permits to save on withdrawal fees and has high limits (9k EUR per day to 50k per month). Online payments are free and ATM withdrawals are 1% (for reference, Darwinex in and out by card = -1.2% due to close loop policy). Most importantly, the spending is available straight away without transfer wait
Lastly, no stupid limits applied on any funding methods!

Please stop for a while the focus on quant analysis and release a real broker
 
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