In another contrarian move, yesterday Warren Buffett joined a social network of a few hundred million members and followed exactly none of them. As of this writing @warrenbuffet has almost 200,000 followers and two tweets. Does this finally legitimize Twitter in the financial world? I’m thinking that happened a while ago. Does it mean we can all get pearls of Warren’s wisdom on our smartphones day and night? It’s early yet, but I’m going to channel the magic 8-ball and say, outlook not so good.
In other financial twitter news, do you remember the little flash crash (twash crash? flash twash?) we got last week when somebody hacked the AP’s Twitter account? Things snapped back pretty fast but it’s a good reminder that trading on tweeted news is still not a fully-baked investment strategy. I’d keep that one in mind when scanning Twitter for trading tips, even from Warren Buffett.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
Here at Currensee towers, we talk about alternative investing a lot: we talk about how good alternative investments are uncorrelated with traditional investments, we talk about how spot Forex is an alternative investment, and we love to talk about how a diversified portfolio of Currensee Trade Leaders can be an alternative investment.
Recently, there’s been some discussion in the media about investing in art, specifically contemporary art. (If you’re not up to speed, “contemporary” art mean art by living artists, or at least artists recently living.) It seem on the face of it, you can’t get much more alternative than art. Let’s take a closer look.
First off, there’s a difference between buying art for an investment and investing in art. Investing in foreign currency doesn’t usually mean having stacks of euros and yen stashed around your house any more than investing in gold or pork bellies means having those things in your house. It turns out that there are funds that buy and sell the art so you don’t have to. You miss out on the “dividends” of enjoying the works of art and impressing visitors, but you also get a fund manager making the choices for you and diversifying the portfolio or collection of art, most likely more than you could do on your own. But the problems of actual art ownership still fall to the fund, as Forbes puts it,
… the real problem with art funds is this: While holding art doesn’t produce annual returns, art funds incur considerable annual expenses, including storage, maintenance, insurance and transaction costs…
As you might expect, people who want to enjoy the art are not always the same people who want to enjoy the investment results of art. More from the same Forbes piece:
Of the 2,000 affluent individuals that Barclays surveyed globally for a June report, “Wealth Insights: Profit or Pleasure?, ” only 10% said they bought fine art purely as an investment. “ Most are buying for their own enjoyment or for cultural or social reasons,” concludes Davies.
Some would call art an alternative investment because it’s relatively illiquid, even in an investment fund format, fine art works are thinly traded. Are they uncorrelated to the broader markets? That’s harder to say, since many wealthy art buyers are probably getting their disposable art-buying income from the profits of their investments in stocks, bonds, businesses, and real estate. Ask any art dealer what happens to their business when the stock market tanks, and I think you’ll have your answer.
And considering their net worths, technology innovators and the venture capitalists who back them are not collecting much art, according to people in both the tech and art worlds.
…start-up culture is in fact one of the very few areas which is less transparent than the art world. You need to be invited to a tech party; gallery openings, by contrast, you just turn up to. If you want to buy the work of a certain artist, then with a little bit of diligence and persistence you can probably manage to do so somehow. And it’s downright easy to phone up the gallery and at least find out how much that artist’s works cost. If you want to invest in a certain start-up, by contrast, doing so is pretty much impossible unless you know the right people. And valuations aren’t kept quiet so much as they’re kept absolutely secret.
There’s room in a good portfolio for almost anything if it’s allocated responsibly with regard to your other investments and personal financial goals. Is art an alternative investment for you? We’re thinking probably not, unless you know a lot about it or have a fund manager or financial adviser who does. Or unless you really just want to look at it on the wall.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
Good news, social media people! The Securities and Exchange Commission has declared that social media are widely used and available, and therefore suitable venues for releasing official corporate information. Over at the New York Times DealBook blog, Michael De La Merced notes that the SEC has reversed direction on their intepretation of the Regulation Fair Disclosure (Reg FD) rule. That rule says that public companies must make important information available to all investors at the same time, so none have any advantage in acting on the news. The SEC now recognizes that a disclosure via social media meets this test – as long as investors have been notified that such information may be found in those channels.
Sounds like a great way to get a ton of twitter followers, just tell your shareholders that you’ll be releasing earnings numbers via your twitter account. Props to the SEC for recognizing what’s really already happening, and also for ruling in the spirit of the rule. This can only lead to greater transparency of corporate information, and that’s always good for investors.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
I’m a sucker for a good venn diagram, so when I saw one on the New York Times Bucks blog featuring the intersection of “Rich Smart People” “Super Secret Formulas” and “Costs You a Lot of Money” I had to learn more. What’s in the intersection of Carl Richards diagram? Hedge Funds, that’s what. The post’s title? “The Appeal of Investments That Cost More and Return Less”
I’m not here to dump on hedge funds – I’m sure there are plenty of folks out there who can do that – but what is this weird attraction to opacity? Why do some people like alternative investments with mystery ingredients? Do these people also buy food without reading the ingredients? Nobody likes mystery ingredients in food, right?
Richards thinks it’s a persistent bit of “(bogus) investing folklore” that “the more complicated and secretive and exclusive it is, the better.” Sure, if the secret to great returns at low risk wasn’t a secret, everybody could enjoy them, and that’s clearly not the case. The folklore persists, but just because you can’t do it – maybe you don’t have the time to run models and keep up with markets and manage trades – that doesn’t mean you don’t have a right to know about how it works and what’s in it.
You know Currensee is all about transparency, so here’s our advice to smart rich people, and it also goes for anybody with money to invest: ask to see what’s inside and how it works; if they won’t tell you, be very very careful. Investors in stocks hold the boards and executives accountable and demand annual reports and audited financials, so should people who hold alternative investments and managed funds.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
FXstreet.com is organizing a special webinar together with Currensee Trade Leader Taylor Growth, tomorrow Thursday at 15 GMT / 10 am EST!
In this webinar Tom Dawson and Josh Colton from Taylor Growth will discuss how a high degree of leverage can work against you as well as for you. Josh and Tom will discuss the risk/reward tradeoff, the importance of establishing your investment objectives and balancing your objectives with your appetite for risk.
Gift for attendees!
A special limited-time webinar promotion will be offered to all attendees of this webinar by Liquid Markets!
Details regarding this promotion will be announced at the webinar including eligibility, enrollment and terms & conditions. Don’t miss out!
If you never attended a webinar before on FXstreet.com, make sure to read our instructions.
Taylor Growth Company is a privately held financial services firm that was founded in April 2007 to develop long term savings and investment programs as alternatives to the stock market. We specialize in spot foreign exchange (Forex) currency trading. Investors have a choice of investment strategies at Taylor Growth Company. Taylor Growth Company is a member of the National Futures Association (NFA), and adheres to NFA guidelines and ethics. NFA # 0405331
The Currensee Trade Leaders™ Investment Program is the unique autotrading service that delivers a select network of emerging foreign exchange managers, called Trade Leaders. Once you open and fund your account, you simply choose the Trade Leaders you want to follow by adding them to your portfolio. By joining the program, you leverage sophisticated technology that replicates the trades of a Trade Leader in your account in real-time, regardless of where you are in the
world.
Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
A Porter Cluster is not just a bunch of beers, it’s when in industry or a kind of business gains traction in a particular place and seemingly competitive businesses thrive side-by-side due to the concentration of talent, investment capital, customers, and just the sheer entrepreneurial buzz of all that innovation in one place. It’s pretty exciting, and even more exciting, the Boston Business Journal just declared a cluster for alternative investing right here in Boston, and Currensee is right in the middle of it.
A number of Boston-based tech startups are working to provide easier access to two niche areas of investing — foreign-exchange trading and quantitative stock trading — that have gained a higher profile in recent years.
The startups say they are capitalizing on interest from investors who’d like to reap more benefits from those alternative investments, but may not want to devote their lives to becoming experts themselves.
Alspach interviewed our own CEO Dave Lemont, and also checked in with Quantopian, a quantitative trading startup, and BuysideFX, a currency management system. As the article says, investors are looking for viable alternatives and ways to invest smarter and more efficiently. Here’s to more investing innovation in Boston!
Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
Here’s what happened: two investment professionals took on a roomful of schoolkids and an orange cat in a stock-picking contest set up by the Observer. Each team invested 5,000 (fake) GBP for a year, and was allowed to reallocate quarterly. The final ROI : Cat, 10.8%; professionals, 3.5%, and students, -3.2%.
Aha, you cry! It’s the triumph of the Random Walk! After all, what’s more random than the behavior of a cat? Economist Burton Malkiel’s book A Random Walk Down Wall Street is a popular one, and it pretty much says that share price moves, if not actually random, are sufficiently complex as to be practically random.
Hold on, put down the catnip, even if the market behaves randomly, does that mean that random picking is the best market strategy?
If you had bought and held the entire FTSE all-shares index (the universe from which the teams picked their stocks) for 2012, you’d have earned 8.2%. That reduces the cat’s edge to just 2.6%, still nothing to sneeze at, and makes the professionals and kids look pretty bad. Maybe “buy the market” is the way to go.
Let’s look at the rules of the Observer’s game. Players were restricted to stocks in one index – not ideal diversification – and could buy or sell just once per quarter. It doesn’t say for sure, but I don’t think they could do any short selling or avail themselves of future or options on the stock in that one index. Would you pay a money manager to apply those rules to your hard-earned nest egg?
Clearly the game has been simplified for the school children and perhaps the cat, too. It’s a fun illustration of randomness, but it was like a poker tournament stopped after the first four cards were dealt. Trading and money management are long-term full-time jobs, and real professionals need access to all the tools and markets they can get to create diversified portfolios for their clients.
Or, you could always just throw your favorite toy mouse at a grid of numbers and hope for the best.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
Are you looking to earn a quick buck? No need to trip over small children or fellow pip chasers, because all Currensee members are getting an extra 10 Bonus Bucks to spend in the Currensee Marketplace as part of our Bucksapalooza extravaganza. The Pips of Currensee are fans of free Bucks and tacky names, and thought there was no better way to kick off this [sticky] summer than to give back to the traders that give us a reason to come to work every day.
To the skeptics and party poopers, here’s the not-so-fine print you’re all waiting for:
You get 10 Bonus Bucks. Really, they’re free. You don’t owe us your firstborn, but we do enjoy homemade soufflés.
Spend your Bonus Bucks and other Bucks you’ve earned by participating on Currensee.com towards purchases in the Currensee Marketplace.
Your 10 Bonus Bucks and this offer will self-destruct on Wednesday, June 30, 2010. On Thursday you will wake up a refreshed individual minus those 10 Bonus Bucks if you haven’t spent them.
Why are we doing this? Well, the obvious answer is because we’re awesome. But the real reason is because we’re always riding our high-horse about real traders, real trades, real time, and it’s time to give back with real rewards. We’ve really pulled out all the stops so you can get your Buck’s worth. Choose from live trade planning webinars, daily newsletters from our Chief Market Analyst, a Thomson Reuters trading widget, and more. In fact, if you’re reading this your Currensee Bonus Bucks are waiting. Quit reading about it and go spend your free money!
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
The pips of Currensee Towers are excited to welcome back Lara Iriarte of ForexInfoUSA for another Elliott Wave webinar on Thursday, May 27 at 8:00am New York time. It’s free to attend with the code “blog” (that’s creative, isn’t it?) We hope you’ll join us. This webinar is for your if you’re curious about how to apply Elliott Wave analysis to your Forex trading setups, even if you don’t know (yet) what Elliott Wave is all about.
Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
This guest post comes from Joel Arnold of Forextraders.com. Joel became a financial and forex analyst firsthand through years of self-taught investment. His interest in economics has been a lifelong hobby, fulfilled through various books, magazines, and courses. Joel has added to his knowledge of international economics through business trips around the world including Europe, Asia, and Africa. Currently, he is writing an academic book while continuing his exploration of economics.
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For a currency trader to be successful, three essential qualities must be present: knowledge about what you are doing, experience gained from both good and bad decisions, and most important of all, control of one’s emotions. Preparation is key to starting out, but a new and aspiring student to the world of trading in any market is immediately faced with information overload. Websites, articles, charts, tutorials, demo accounts, and training classes of all types and sizes are but a few items demanding your precious attention when you are starting your process. Where do you begin?
There are many excellent forex training courses available on the Internet. You must invest the time to familiarize yourself with the process, the lingo, technical analysis and chart indicators, brokers, and demo accounts. From these humble beginnings, you will begin to build the knowledge base necessary to satisfy your first “quality” requirement.
There are also many sites that offer reviews of forex brokers. Your broker will provide access to the market, a forex demo account for you to gain risk-free trading experience (“quality” number two), and charts to guide you through the process and help you develop your own profitable trading strategies. Forex charts come in a variety of styles and types, some two-dimensional, some even three. Let’s keep it simple and use the figure below as our guide, taken from one of many free educational papers on the web.
This chart tracks the daily price activity for the British Pound (GBP) versus the U.S. Dollar (USD). Notice the nice wave pattern of the red and blue “candlesticks”. The candlestick symbol presents the high, low, open and close for the trading period. The little box represents the open and close value range, and in this case, it is Blue if the closing price was higher than the opening. The price figures on the right of the chart represent the conversion from Pounds to Dollar. Every currency pair has an “accepted” way of being communicated. Be sure to learn these conventions. One example above is “1.8825”, which translates to one Pound equals 1.8825 Dollars. If you ever hear the term “Pips”, that refers to the furthest figure to the right, or 5 pips in this case.
The chart also illustrates how to use indicators to determine when it may be the best time to buy or sell a position. Did you notice the “RSI” chart on the bottom? This stands for “Relative Strength Index”, one of a variety of “momentum” indicators. A momentum indicator attempts to calculate when the market is overbought, a “sell” signal, or oversold, a “buy” signal, by analyzing the magnitude of recent gains and losses. In this case, the chart uses an 8-day prior period RSI, the blue line, and also inserts an 8-day Moving Average curve, the red line, in the chart. When these lines cross, a signal is given that it may be advantageous to buy or sell as represented by the purple and green shaded areas.
The market strategy presented above is one of the most basic ever conceived, i.e., buy on the lows and sell on the highs. In forex, you can also use “leverage” to magnify your gains, and unfortunately, also your losses. With leverage, you borrow from your broker in order to purchase a larger lot of currency, which generally comes in $100,000 lot sizes. If you have $10,000 in your account, your broker may allow you to borrow $100,000, thus giving you the opportunity to increase your profits ten-fold. These decisions are highly dependent on risk and volatility issues that must line up correctly before engaging in the practice.
Foreign currency exchange rates fluctuate based on a variety of determinants, both technical and fundamental. Technical factors relate to the study of the dynamics of market trends once they are under way, rather than with the supply and demand factors, which cause them. Technical analysis searches for recurring patterns, resistance levels, and the strength of trends by using moving averages and momentum indicators. Fundamentals relate to conditions of a country, either economic, financial, political, or of a crisis nature. The recent debt crisis in Europe confirmed the important role that fundamentals play in our global markets.
After a bit of preparation, knowledge gathering and assimilation, the next step in the process is to gain experience with a broker’s forex demo account. Many offer $10,000 of “play money” to try your hand at online trading from a virtual account status. Gaining experience is the second quality you must master before putting real capital at risk in the market.
Lastly, there is a psychology of trading which must be respected. Emotions can undo even the best trader’s intentions. Document and develop a trading routine. A disciplined approach is the only way to effectively control one’s emotions, “quality” number three in our hit parade.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.
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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.
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