Why Darwinex is not growing?

[IlIlIlIlI]

Let' s speak in € .
Management fees are calculated YTD.
For my veterans portfolio I paid 6€ management fees for 2021
Performance fees are 6€ too on last 3M
Net profit is 22€ on last 3M

It's not a real big difference based on the fees if you calculate the old fees: just 4 € more net profit.
IMO a significantly higher difference against your investment comes from the real reduction of the VaR b< the last change:
with a simple calculation a 10% VaR would double your profit against the estimated 5% real VaR (I agree with your calculation above where raised by the target VaR reducing the replication factor) which would at least double your net profit.

 

[IlIlIlIlI]

Gamblers and greedy investors think they can withstand psychological pressure of significant DD,but practice here at Darwinex has shown that is not the case.

They are more successful on other platforms.
What I'm missing at Darwinex is a definition of traders and investors they want.

 

[davidautentico]

Almost all investors are dumb money in Darwinex.

I've seen how my investors close their losing positions when some DD appears or if the darwin doesn't make 5% in two weeks..

IMO, not solution here. Darwinex needs institutional investors, otherwise they have to return to 10% VAR to allow lucky Darwins get some 100% and therefore, attract dumb money again (etoro model).

 

[Gargamel]

IMO, not solution here. Darwinex needs institutional investors,

Agree.Some hope was the idea of Mendels(Darwins of darwins),where Managers would get lets say 5% reward for their portfolio work out of 20% Performance fee,but darwinex bosses took that 5% for themselves and forgot about Mendels.

 

[CavaliereVerde]

but darwinex bosses took that 5% for themselves and forgot about Mendels.

This is the reason I voted for lack of improvements.
We have same alpha as before, same technology and we are paying more.

 

[Gargamel]

We have same alpha as before, same technology and we are paying more.

The boss tried to sell this by saying investors will pay much smaller commissions for trading activity in darwin and thus get much less Divergence...But this is nothing less than putting a lipstick on a pig,if you introduce Management fee that didn't exist before.🐷

 

[IlIlIlIlI]

Darwinex needs institutional investors, otherwise they have to return to 10% VAR to allow lucky Darwins get some 100%

Fully agree. The last changes have to be redeemed, including the target VaR which keeps the Darwin out of a recovery of the trading account up to 50%.
Darwinex tried to rescue HFD and 7 millions AuM on it, but with that and it didn't work.
Investors have to make their own decisions, and if they don't want to share 30% DD they leave at 15% DD, with profit or losses depending on their own timing for the decision to buy.
The idea to tell investors to stay in a losing position is wrong, and to do it by the algos is also wrong and a hidden kind of investment advice.
Fees wouldn't hurt traders and investors as much if the potential profit wouldn't been cut by 30 to 50 % with the same changes. That decision can't be called wise, as the promised fresh investor money didn't arrive until now.

 

[Naragot]

This point doesn't hold against reality of Darwinex

Why not? Is it so dangerous for Darwinex to show other VARs except 6.5%? Darwinex provides x3 leverage but it is really hard to find it out when you are on Darwinex web page 1st time. By the way Darwinex user interface is very uncomfortable for newbies. Too much information.

But if the target are professional investors...Well okay but where they are?

 

[IlIlIlIlI]

This is the reason I voted for lack of improvements.

It would be the first step in the right direction if they wowuld take back the last changes destroying the chances on higher profits on the Darwin and for investors.

 

[Naragot]

Agree.Some hope was the idea of Mendels(Darwins of darwins),where Managers would get lets say 5% reward for their portfolio work out of 20% Performance fee,but darwinex bosses took that 5% for themselves and forgot about Mendels.

Do you mean porfolios? Alpari tried this feature - no luck.

 

[CavaliereVerde]

We often read that low risk = good trading but real traders know the truth.
If you trust your strategy you try to maximize risk to maximize return.
They lowered the risk becase their confidence in the asset class is lower.
If the asset is losing better to lower the risk.
Suppose the average lifespan for investor was 6 months, no probably it is 9 months, more time paying management fees.

 

[Gargamel]

That decision can't be called wise, as the promised fresh investor money didn't arrive until now.

Simply put:the boss lied.He said important people were making 'right noises' about implemented changes...Or somebody fooled him big time...There are plenty of big talkers around the boss:Alpha leader,providers of GFA and ZVQ...

 

[Naragot]

otherwise they have to return to 10% VAR to allow lucky Darwins get some 100% and therefore, attract dumb money again (etoro model).

Right. I haven't seen longterm institutional investors in forex. Sometimes they appear but then suddenly disappear.

And I don't think that their money is smarter than retail investors. I had some institutional investors - everything is the same. DD - withdraw.

 

[IlIlIlIlI]

But if the target are professional investors...Well okay but where they are?

There are none for Forex markets, not in Germany and I assume also not in other European countries or the U.S. or China, sorry to write that.
Professional investors use the regulated (!!!!) future markets for their risk appetite in that direction.

The legal hurdes are too high for them and the risk is not attractive for them.
What you have is thousands of agents who are able to persuade private investors to go on unregulated investment products, but they do it only for their commision.

 

[IlIlIlIlI]

Simply put:the boss lied.He said important people were making 'right noises' about implemented changes...Or somebody fooled him big time...There are plenty of big talkers around the boss:Alpha leader,providers of GFA and ZVQ...

The main reason why I wouldn't call it a lie is that maybe, maybe, maybe there could be a change by legal reasons which is made when they have the Spanish licence. I don't know whether there can be dependencies.
If they could make a real new asset class out of the Darwins which would also affect the tax side (and you are not paying taxes for a social trading follower account calculating hundreds of Forex trades as an investor, but only one buy and sell trade), that would be a game changer.

 

[Gargamel]

I had some institutional investors - everything is the same. DD - withdraw.

Psychology:Loss aversion.DD is always the problem:investors in Hedge funds cannot just take their money out without financial penalty or time constraint.There is a reason for that.

The legal hurdes are too high for them and the risk is not attractive for them.

They were actually thinking about Family Offices,not real Institutionals.

 

[CavaliereVerde]

I wouldn't call it a lie

I wouldn't call it a lie, a BULLSHIT fits much better! 😁
The bullshit that Pivot darwin was better for customers, or designed to expand investor base...

 

[Gargamel]

Alpari tried this feature - no luck.

Portfolio Managers at Alpari literally didn't stand a chance because it was 'Max Risk' environment,no constraints for traders and abnormal Performance fees charged by traders.

 

[IlIlIlIlI]

I had some institutional investors - everything is the same. DD - withdraw.

I assume that was not at Darwinex and they came from Russia or other eastern European countries, there are other rules where I would not expect they could be implemented in Spain.

 

[Naragot]

We often read that low risk = good trading but real traders know the truth.
If you trust your strategy you try to maximize risk to maximize return.

Can not agree. Even with a good strategy assymetry of profits and losses will wipe your account (well not wipe but will leave you in a forever drawdown). It is a sad truth. You have to add a lot of luck to your good strategy to earn much with high risks.

From my experience 25-30% target DD is the balance between risk, reward and your nerves. x2-x3 Darwinex leverage allows to get this balance. But this feature is hidden too deep.

Well I am not against 6.5% VAR. Yes it adds some more toxicity to X3 leverage but it lowers assymetry of profits and losses. But with this 6.5% VAR they hide the opportunities