Ayondo TradeHub Platform

Ayondo is a trading platform and social trading network launched in Germany in 2009. It is currently headquartered in London, where its trade execution services (ayondo markets) are regulated by the Financial Conduct Authority (FCA). The other half of the company, (ayondo GmbH) which offers social trading services, is registered with BaFin, Germany's financial regulator.

From their site:

'TradeHub uses the very latest HTML5 technology and has been purposely designed for people who are both new to trading as well as professional traders. TradeHub allows clients to trade like institutional investors. By providing them with tools and resources previously only available to institutions, clients are able to take charge and manage their investments. From top institutional grade research to real time market news, clients are equipped with everything they need to meet their trading goals in one beautifully designed, elegant and easy-to-use platform. Created with no one but the client in mind, TradeHub is intuitive enough for anyone to use. The entire trading experience has been streamlined and a platform created that is fully customisable to suit client trading needs as well as being rich with exciting features and tools.'

Ayondo's stated mission is to revolutionise the retail trading and investment space. They're doing this by connecting investors (called followers) with successful traders (called Top Traders) in a transparent and innovative way. In order to become a Top Trader, one has to go through five career stages (street trader, advanced, professional, risk-adjusted, institutional) each one with its own requirements to be met. For example, there is a maximum accepted drawdown of 25%, the whole performance must be positive and a certain number of round trades must be completed at each level before being able to progress to the next.

There is a wide variety of financial instruments for traders to choose from: currencies, commodities, indices, shares, interest rates and bonds. Furthermore, traders from the UK or Ireland can take advantage of the spread betting offer. Trading is done on an user-friendly and highly intuitive platform called TradeHub. One of its interesting features is the variable margin option which allows you to adjust the margin needed for opening trades and thus control the funding charges for overnight positions. The remuneration model is simple: traders will receive between 1 and 5 USD (depending on the career level) per lot (100.000 units) of volume generated by their followers. It is worth remembering that you can get followers and earn money even though you're on a demo account. However, beyond increasing their credibility by using real money, all traders who have accounts with more than 1.000 Euros will be highlighted with an icon on their profiles.

How does an investor go about finding who to follow at Ayondo? First step is to go to the 'Find Top Traders' page where the list can be ranked by profit/loss percentage, maximum drawdown, volatility, number of followers and number of trades/month. You can also see the career level and whether the account traded is a demo or a live one. If you're satisfied with the information, you can directly follow a trader from this page, but if you want more, there are plenty of detailed statistics in the trader's profile. Here you can find a description of the strategy, in English and German, transaction history, a performance chart with comparison to DAX index, asset allocation and P/L and risk metrics.

Once an investor has decided on the traders he wants to follow, he can choose up to five of them and start using Ayondo with a minimum deposit of 100 Euros. There are several risk management tools that the investor can use such as setting a maximum loss level for the account, closing or changing a trader's positions and reducing or increasing risk with a selected trader and specific financial instrument. There are no direct fees to Ayondo or any of the followed traders that an investor has to pay. All the costs are included in the spreads, so there shouldn't be any surprise when seeing an indicative spread of five points on DAX or three pips on EUR/USD.

Slippage (the difference in opening/closing price the Top Trader gets and the price the follower gets) can be a major issue with social trading. However, in Ayondo's case, the integrated broker solution means that both operations are executed on the same platform which should keep slippage levels at very low levels.

Before I finish, I'll mention one drawback that I noticed: despite being a social network, it doesn't offer the possibility for followers to interact with Top Traders or amongst each other. However, as an expanding company - it just announced in April an additional CHF 6 million in funding - Ayondo will certainly continue not only to grow, but also to improve.

What do you think of copy trading as a strategy. What are its Pros and Cons?

Daniel Lindsay of MahiFX.com and Full Time Forex Trader had this to say:

A copy trading set up can be a good strategy if you find a profitable investor whose methodology you agree with. Anything is "viable" so long as it's "profitable" and within legal bounds.

Pros?

- You're removed from the trading process. A copy trading set up will mirror the actions of the investor scaled to the amounts you're willing to put up.
- You can disconnect yourself from the copy trade if you want to manage an executed trade yourself.
- A novice can take advantage of the years of experience that a more knowledgeable investor could have.
- These kind of investment strategies are also referred to as "People Portfolios". Their popularity has caused the industry to embrace the change and view them as a new type of investment instrument.

Cons?

- You're removed from the trading process. You're not making the decisions for yourself so you're not honing your own experience and building your knowledge. It's easy to observe; things stick harder when it's your mistake or victory though.
- You're at the mercy of that investor. If they make a bad decision, you'll pay for it too. If they decide to get out of trading, then you're left looking for another profitable investor that shares a similar methodology as the previous.

Ultimately, the decision comes down to the individual. If you're just looking to increase your investment revenue without the effort of learning and mastering everything yourself; copy trading can be an excellent choice. If you're more interested in learning a trading system and strategy; you would likely be better off pursuing another method.

Review by Trader malcr001: 25/04/2016: Ayondo is actually my broker. I signed up for an account a couple of months ago. The account opening process was far from quick and I think they could do much better with the email support but they have a number of advantages for someone like myself that likes to hold long term positions. The adjustable margin and the fact that they only charge rollover fees on the actual amount you borrow has been key. One thing I wish they did was lower the minimum margin requirement on common tech stocks. The additional client protection is an added bonus. They also lowered the rollover fees a little for those MiFID categorised as a Professional client which is an added bonus.

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