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.

Could disallowing pre-IPO Darwin data from all scores and contests actually encourage new good traders?

Aside from eliminating fake track records and farming, could there be some added benefits?

Perhaps traders will be less likely to sit back and keep trading on their old platform thinking they can bring in their old track-record at any time. Maybe they will be encouraged to join Darwinex immediately so they can start building a track record so they can get in on one of the best trading contests ever invented and the best alpha seeking match-up system ASAP.

Perhaps good traders will see they no longer have to compete with fake track records and farmers and be more encouraged to join.

4 Likes

IN @bianka 's final reply before closing the thread

In relation to the suggestion to stop accepting migrations (which was the suggestion formulated in the first post), at the current time Darwinex’s position is the one published in September 2018 . Nothing essential has changed since then.

Some excerpts:

Suspicions cause lively debate… possibly because there’s no 100% failsafe approach to definitely prove / rule out theft / forgery. Further, beyond the first checks, validation costs increase exponentially but barely add certainty.

Which begs the question – where to draw the line? Should we either:

  1. Discontinue migrations – depriving traders, investors and Darwinex of their pluses, or
  2. Support migrations – incurring the risks and the validation burden.

Our stance on this one is to continue to support migrations, providing investors with transparency & choice. Investors, not Darwinex, should ultimately make up their mind on whether / when to trust a track record.

And:

Before discussing what checks Darwinex could or should deploy, please bear in mind:

  1. Our reputation is on the line , and “our” means not just Darwinex, but everyone who’s got something at stake in the concept doing well.
  2. We flag migrated accounts , disclosing the date before trades are with Darwinex.
  3. Darwinex certifies every live trade after migration – only live accounts traded with Darwinex broker are eligible for DARWIN listing,

The key to settling debate is to acknowledge that beyond some efficient checking, nothing beats common sense and patience:

  • If it looks too good to be true, it may not be true . With thousands of DARWINs out there, something standing head and shoulders above track records with 5 years history might be either fake or unsustainable (and possibly both).
  • If someone stole somebody else’s EA / track-record , etc. and it’s that good, eventually whoever actually owns it will find out.
  • Whoever managed to fake yesterday’s track record , will still need to beat the market tomorrow . Faking the past is tough – faking the future is impossible.

And:

Thereafter, the choice is EVERY investor’s:

  • WAIT for x seconds / days / weeks / years / decades before investing, or even,
  • Don’t invest in migrated DARWINs, period.

Take your time – the choice is YOURS.

This is entirely from the point of view of protecting investors but what about protecting the trader from unfair competition in either the Darwin investing game or the Darwinia game? I have reason to believe that Darwinex is actively trying to attract new solid traders and so should probably try and view this policy through the eyes of a potential new solid trader. Completely omitting data from pre IPO date from all scores (at least by default) and contests seems like the only way to achieve 100% fairness to all traders. I’m confident many will be happy to start from scratch if the benefits are great enough… And the benefits to the trader are pretty good here!

1 Like

I’m not saying disallow migrations or pre-IPO-trading all together, sure let them in, even show them on the chart (with an IPO marker), or maybe even give some non default stats that an investor can turn on at will. Like a “what if his pre-IPO data is for real?” button. Or something like that.

PS thanks for the mug!

3 Likes

@bendex Thanks a lot for the insightful comments.

The migration tool dates back to a time when no-one knew Darwinex and migrating track records was a great commercial tool because a) the most investable traders were most likely to use it and b) the incentives to faking, but also moving to Darwinex, were lowest.

As we go forward, I believe two things will happen If stuff goes to plan,
a) we’ll (meaning, the entire community, not just Darwinex, aka the IT department) attract more and more solid traders from environments where faking track records is impossible (e.g. you can’t fake an interactive brokers track-record)
b) we’ll organically groom & attract more professional investors, who will make the best use of the tools on offer - migration policy or not.

We have some interesting feedback from A and G - both of whom you spoke to. Their key insight was that Darwinex is for Alphas - mature individuals who are committed to personal improvement through deliberate practice.

E.g. in their words “good, solid traders” = Alphas. After 8 years going at this, I have yet to meet a mature trader who wasted a second of his life whining about stuff they can’t change, with migration vs. non-migration being one of them. It’s like marmite, some people will love it, and some will hate it, regardless of what we do.

Which is a very long winded way of saying that:

  1. Despite the fake cases, which are few and far between, despite the whole hullabaloo - in the bigger scheme of things, more traders don’t know about Darwinex than know about Darwinex, and one feels reluctant to bin their track-record because of a couple of crooks who allegedly fooled some investors (who overloooked the fact that we highlight everywhere that it’s a migrated track-record, but it’s still our fault)
  2. I think the subject will gradually fade into irrelevance either because we do better and it matters less and less, or because we fail to attract Alphas, in which case we will have become irrelevant.

Personally, I think that if Alphas don’t care, neither do I. We have better uses for the Tech team (improve our positioning, integrate with Interactive Brokers, pivot our business model) than commit more resources into making marmite haters love marmite.

1 Like

Thanks for the reply and I’m sure you’ve been improving and will continue to improve more regarding fakes.

I hope you’ll consider that allowing any trader who happens to have 2 or more accounts they can (cherry) pick from at IB (or anywhere) to get full credit for scoring exposure is allowing track record farming to take place to some degree. Good for the new IB migrated traders but bad for loyal (non-farming) Darwinex traders, bad for (uninformed) investors and bad for potential new traders with one account or no accounts that are migrate-able. I’d be surprised if all alpha’s that fall in to the latter categories don’t care about that.

1 Like

Also this week we have 2 migrated trackrecords
https://www.darwinex.com/filter/LATEST
WES and VDG
100 migrations per year, how many real Alpha ? 2 maybe…?
Yes real traders do not care, the problem are investors baited by the 98 non-Alpha.

1 Like

@bendex I think I wrote a lot of blah-blah and didn’t succeed in bringing my point across.

I suspect asking people about track-record farming is a bit like asking people about marmite. REGARDLESS of what you do some people will absolutely hate it, and some people will think it’s a great idea. If that’s the case it’s impossible to “combat it”, and it’s arguably not the best use of scarce resources.

Imho the question is not so much “track-record farming combat measures” Yes / No, but rather, what’s going to bring Darwinex forward the most:

  1. Deploying Track-Record Farming prevention methods OR
  2. Integrating Darwinex with Interactive Brokers, OR
  3. Making sure people don’t perceive Darwinex as one of 500+ MT4 CFD brokers OR

And the list goes on.

I’m reading this book and it basically asks you for your ONE thing. What is the ONE thing Darwinex can do that will make everything else we have to do either a) much easier or b) unnecessary?

Track-record farming is not my ONE thing at this point. The other 2 are far closer to my top picks…

What, in your @bendex opinion, should our ONE thing be?

1 Like

@CavaliereVerde You make a great point : 100 migrations per year, how many real Alpha ? 2 maybe…?

Let me add to that. 200+ new, not fake, not migrated, true Darwinex live account traders a month and how many real Alpha? That’s the reason we’re called Darwinex, it’s the nature of the beast.

Let’s say we invested 20.000 engineer man-hours in “fixing” a problem that’s unsolvable (again, some people will like the fix, some won’t, just as some people love Allah, some don’t), and how are we going to increase the number of Alphas?

What is your ONE thing personally, and for Darwinex, @CavaliereVerde?

2 Likes

The point is that new and honest trackrecords are not attractive and so not a danger for investors, farmed stuff is attractive. A single farmed darwin in a portfolio can prevent an investor to be profitable.

My one thing about Darwinex is:
Can investors make money with Darwinex?
Trackrecord farmers are the main obstacle for this to happen in my opinion.

If investors do not make money they will never recommend Darwinex to other investors, and AUM stagnates.

1 Like

Well about that… I don’t think marmite is a good analogy because logic and math dictate that allowing track record farming is good for some and bad for others it’s little to do with taste. In fact it’s more appropriate to say “should we allow some cheating to take place or not?” Granted some will think it’s worth it to allow the cheating and others not and that’s why I started the poll.

I didn’t say “should be addressed immediately.” I could have said “should be addressed eventually.” Maybe I will edit that. Also to that point, would changing the system to disclude pre-IPO data from all scores be drawing that many resources?

And what about just discussing things and the possibility of considering adding the mitigation-of-track-record-farming to an eventual to-do list?

And to answer your question honestly, I would do #1 first because I think it would make #2 and #3 more practical and valuable.

1 Like

@CavaliereVerde - farmer or no farmer, ANY investor on Darwinex can see “migration” left right and center.

If track-record migration is the reason today’s investors can’t make any money, then we have to go for other investors, today’s investors will lose regardless of the DARWINs, Darwinex, or the Darwinex’ migration policy.

In other words, the problem is the investors - not the migration

2 Likes

This is a fine argument but remember I’m talking about exposure granted to track record farmers and the effect it has on non track record farming traders.

@bendex Ok, forget the marmite.

Let’s look at this from a logic standpoint. We currently provide EVERY investor with 2 sets of information

  1. A DARWIN’s track-record BEFORE coming to Darwinex, which Darwinex does NOT vouch for.
  2. A DARWIN’s track-record with Darwinex, which Darwinex DOES vouch for.

At stake here is whether or not Darwinex has the moral right to choose on investor behalf.

If (and it’s a bit IF) Darwinex had the right to pick, should Darwinex opt for 2, only or 1+2?

If you were an investor, what information would you rather get, 2, only, or 1+2, with adequate disclaimers?

Personally I wouldn’t like Darwinex to make the choice for me - I consider myself smart enough to set my own criteria, which means, at most what I want is a toggle allowing me to display / ignore… but that’s already there…

Now we’re talking! Yes I’d want all the info but allowing the pre-IPO data to give more exposure i.e. be at the top of lists, get in to special rows on home page etc. must be bad for non-track-record farmers.

1 Like

@bendex please see below.

I’ve yet to have a discussion with a target Darwinex investor who deems this the ONE reason why they would, or would not, consider investing in either Darwinex, or a DARWIN within Darwinex.

Darwinex has far less influence on investor behaviour than this thread implies, and imho that’s actually a good thing. We don’t want to nanny investors, they deserve better than that, and they know it.

1 Like

@bendex so an investor & DARWIN individual switch saying “ignore pre-IPO data for this DARWIN” would do the trick?

If so, I’ll pass to the dev team to include in the “wish-list”, with the caveat that I personally deem IB, re-positioning etc. a bigger priority :slight_smile:

2 Likes

@juancolonbo
OK that’s good, it’s just that I couldn’t help but notice that until I started getting front page exposure, I wasn’t getting many investors but maybe I’m being anecdotal. I also saw someone mention track record farming right off the bat here all though in a little different uninformed kind of context: https://www.forexfactory.com/showthread.php?p=12786771#post12786771

Thank you for taking the time to post, we appreciate it.

Well, I’d love that but I’d love it more if it was turned on by default and if pre-IPO data didn’t boost front page exposure. Even if it doesn’t make much of a difference, I’m a nit when it comes to fairness and mathematically correctness.

2 Likes

@bendex you’ve got a point in that some DARWINs reach “meta-famousness”, in that they become popular with investors because they are popular with investors.

My own anecdotal evidence (and we’re looking at this in detail) is that it takes about 500k of investor AuM to start being noticed, and THIS is something we have to work on. I personally doubt it’s got to do with the farming, but it’s one of the hypotheses we’re testing.

My gut feel at this time is we need to look elsewhere:

  1. How many investors are genuinely capable of making the most of the DARWIN asset?
  2. If there’s a Darwinian filter on the investor, in addition to on the trader side, how do we solve that riddle?

Personally I think the ONE thing is closer to that (who’s the right investor, how to set him up to succeed) than the toggle, but we’re looking into what triggers “meta-investor popularity”. The ingoing hypothesis is that the more tractable investor challenge is not “build your winning DARWIN portfolio” (there’s a lot, arguably too many landmines there), but a) buy 2-3 traders you like or b) buy a ready made DARWIN Portfolio (codename is Mendel). If it’s the latter, we’ll need either a new Darwinex business unit (it’ll have to operate at arm’s length from the Exchange) or to tackle a completely different investor base (and even there, I wonder how many professional investors worldwide can build a DARWIN portfolio.

E.g. if investors need a migration toggle, perhaps the problem goes beyond the toggle, or even migration…

2 Likes

Clearly penalyzing farmers is not enough.
There is a lot of work to do on investors.

Thanks!

For what it’s worth, I’ve been dabbling in investing and bendex the investor would appreciate such a toggle if it applied only post-IPO data to every single thing including return. And it would also be appreciated if it also effected the filters.

2 Likes