Community Platform

In June of 2012, a proposal by the National Futures Association requiring stricter regulation of PAMM accounts went into effect, sending many money managers and CTAs scrambling for PAMM account alternatives.

A PAMM account, or Percentage Allocation Management Module, is simply a way for investment management firms and CTAs to manage individual investor accounts more efficiently. Multiple individual accounts are aggregated into one “Master Account,” which is traded by the money manager or CTA. It is operated as one pooled account and the P&L is divided equally among the investors based on their equity in in it.

In April of 2012, James Bibbings, a former NFA supervising auditor, wrote a very informative post discussing the implications of the pending proposal. Appearing on SeekingAlpha.com, the post explained how the NFA felt PAMM accounts too closely resembled Commodity Pools, without being registered as such.

The points they brought up described multiple instances of structural problems. Issues with liquidity and margin were posing risks to investors and contributing to questions about the fairness of the division of P&L among sub-accounts. In the proposal, the NFA recommended the restructuring of PAMM accounts as a means of eradicating any dangers they could cause participating investors.
Bibbings also notes that PAMM scrutiny has reached the state level. Pennsylvania state security regulators saw the PAMM allocation system as a mechanism that was generating a “synthetic securities product.” This view made PAMM accounts subject to many additional securities laws and regulations in Pennsylvania, and could do so in other states, too.

At the time of Bibbings post, things weren’t looking good for PAMM accounts as they fell under intense regulatory scrutiny. Two months later, after the proposal took effect, “traditional” PAMM accounts began disappearing to make their necessary compliance changes. Some companies have seized the opportunity to create PAMM alternatives and others offer consulting services to help existing PAMMs comply with the new rules.   These instruments play an integral role in providing CTA’s and Money Managers with the key benefit of PAMM accounts: centralized management.

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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.

Throughout the past few months, 200 of Massachusetts’ best and brightest technology companies have been competing for the prestigious Mass Tech Leadership Council awards.  Submissions were judged by a panel of Council trustees and local thought leaders who narrowed the contest down to 15 star-studded companies. We were totally psyched to learn that we made it to the finalist list!

Our fellow finalists could not be a more eclectic bunch of public and private companies. They have a wide array of products, ranging from Gemvara’s design-your-own jewelry to iWalk’s electronic limbs. The competition was stiff and we’re proud to be the only financial services tech company who made the cut.

On October 6th, all fifteen finalists will duel it out for the Product of the Year title at the Massachusetts Technology Awards Gala.  Throughout the cocktail reception, the CEO of each company will present their product and the winner will be judged by a live audience vote.   We’re counting on Currensee CEO, Dave Lemont, to dazzle the crowd and bring home our first Product of the Year Award!

Check out our competition (and their blogs) below:

AisleBuyer- http://blog.aislebuyer.com/

Apperian- http://blog.apperian.com/

Digital Lumens- http://www.digitallumens.com/company/blog/

Gazelle- http://blog.gazelle.com/

Gemvara- http://blog.gemvara.com/

GrabCAD- http://blog.grabcad.com/

iWalk

KangoGift- http://blog.kangogift.com/

Myomo

Peer Transfer

SpaceClaim- http://www.myspaceclaim.com/blog/sc/default.aspx

Strohl Medical

TripAdvisor- http://tripadvisor.wordpress.com/

Vecna Technologies

If you’re interested in attending the event, visit the Mass TLC page here.  We’d love to have your support!

 

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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.

Today is Social Media Day. There are no fireworks. No parade. No band. Maybe a couple extra @'s and RT's, but as I see it, Social Media Day is a pretty big accomplishment for the social community.

I kind of equate Social Media Day to Earth Day. Every day should be about taking care of our planet. Recycling, being as green as we can, conserving our precious resources, but it's just not that way. Most people don't think about the Earth with every bottle of water they throw away or every gas-guzzler they drive. So, Earth Day becomes the event or reminder that it's important.

Seeing as we are a Forex trading social network, every day here at Currensee is social media day. We spend much of our time talking with our fans on Facebook, retweeting our followers on Twitter, discussing hot topics with the members of our social network and participating in discussions on Linked In. The good news is that it's ingrained in what we do. We don't need a special day to remind us. It's just how we do things around here.

So I ask you, on this Social Media Day, what are you doing to be social? How are you building your social network or your social brand? Would love to hear from you.

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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.

1 Comment

It is no secret that the vast majority of mutual funds underperform their benchmarks. This is one reason why hedge funds grew like weeds over the last decade as many managers wanted to showcase their talents at going both long and short. Despite a volatile decade, many hedge funds have found stock picking to be harder than they first thought. Sadly, the ones that are hurt the most by this are investors.

Right now index funds have become a popular alternative, as a passively managed product should at least equal the benchmark. Still, we live in an era where the Dow Jones seems to always be hovering 10,000, the Nikkei cannot hold onto an upward trend and the European equity indices seem to be caught in the middle. Researchers at Dimensional Fund Advisors have released a study that shows the top performing 25% of stocks are responsible for all the gains in the stock market from 1980 to 2008. That means that 75% of stocks lose money. Since industry regulations mandate that a mutual fund has to be highly diversified, it is no wonder that mutual funds underperform. Have I mentioned that these funds charge fees to manage your money as well?

For those that have an interest in seeing their investments grow it is time to look outside the traditional investment box.

How about investing in currencies? The universe of currencies is small compared to that of equities. The chance that the euro, pound, yen or the US dollar goes to zero is small – very small. Just look at the woes in Europe - and realize that the euro is still worth more than the US dollar - and you get the picture. Transparency, liquidity and other important factors are all extremely high. Fees should be relatively small (swap points and other factors, which will depend on your broker) and you are your own manager.

Hesitant? Then take a look at your mutual fund holdings and tell me be about each company that you own. Not sure where that holdings list is? You shouldn’t be afraid of doing a little homework and investing in foreign exchange.

In terms of looking for information and strategic ideas, you should start at Currensee. Here there are investors and traders who show their trades, strategies and returns. Build a team and share ideas. Take a look at the ‘Strategy’ section, where you can see profitable and not-so-profitable trading ideas. In the ‘Community’ section, you can filter through these strategies to help you find one that matches your style.

Will the problems in the Euro Zone continue and help the US dollar gain versus the euro or has the euro hit bottom? Both the Australian and Canadian dollars are near parity to the US dollar, but can this continue? The yen has made sizable gains against most all currencies over the past few years, yet it has major fiscal problems. To say that there will be sizable moves ahead in the currency markets is an understatement.

You could always place more money in a mutual fund, most of which underperform, or you could manage your own money, learn the world of foreign exchange and look for returns in the world’s largest market.

This report is for your information only and does not constitute investment or business advice or an offer to buy or sell securities.

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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.

How has your trading performance been in the currency markets? Are you capable of being a team leader or are you still searching for the right technique that will help discover those winning trades? If you would like to know where you stand as a trader then the place to go is the ‘Leaderboard’ on Currensee. Here you can view how community members are performing by comparing performance and risk factors and filter by currency pairs, trading techniques and/or by the region where the trader is located.

Let’s try an example. To navigate to the Leaderboard click on Community at the tab on the top of the Currensee page and then you will see the Leaderboard tab directly below. I searched by USDCAD and filtered by traders using a Technical approach and included traders based in all regions. Two pages of results initially appear and it is sorted by the trader with the top TAI (Trader Authority Index). In short this index compares performance to risk taken on a trade. I then scrolled back to the top and viewed the results by ‘Risk’ instead of ‘Performance’. The top trader not only has a strong performance record but also has strong risk characteristics (reason why they are on top). His max draw-down is 4% therefore traders that prefer to trade off daily charts may want to follow this trader. Those with shorter time-frames such as 1 and 5 minute may want to keep filtering.

There are other filters that we can use as well including ‘History’. Last year was an especially volatile one for the CAD while other pairs such as EURJPY saw oscillation in 2009. If we adjust the ‘History’ to the last 6 months in USDCAD then a whole new leaderboard will appear. This should be no surprise as today’s markets are certainly extraordinary and are ever challenging for traders.

What type of traders are doing better? Those that prefer to analyze fundamentals or those that prefer charts? I filtered the Leaderboard with EURUSD and the top 5 TAI scores were 94.5 or better for those using a Technical approach. The top 5 using a Fundamental approach have TAI scores of 87.5 or better. Time to study the charts and ignore the economic news? Maybe for some but for others draw-downs matter (especially if you don’t like losing) and on average those that were using a Fundamental approach had lower draw-downs. One last filter here. Where are the better EURUSD traders Europe or the US? I sorted using both technical and fundamental approaches and the results look to slightly favor the Europeans. I should also mention that traders in ‘Asia Pacific’ more than hold their own when trading EURUSD.

I hope I’ve demonstrated a few ways to utilize the Leaderboard and how it can assist you. If you are looking to add a teammate or just to check the performance of your trading this is the place to go.

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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.

1 Comment

There was a recent survey posted to the Currensee discussion board with the question "What is the worst thing that can be done to lose money?" The survey includes the following choices:

  • Using large stop losses and small take profits
  • Using no stop loss at all
  • Take advantage of high leverage to boost your loss
  • Buy the top sell the bottom
  • Trade the news

I'll take a look at the available survey responses individually

The first one is basically having a Reward/Risk ratio of less than 1. The R/R level is one of those metrics which is often cited in isolation, but should never be used by itself. It's like the Win%. Neither of them, by themselves, tells you anything. They must be used together to gauge trader or system performance. As such, having an R/R less than 1 cannot be called an error without having more information.

The second possible response is not using stops. There are a lot of folks out there who pound the table saying stops must be employed at all times. The fact of the matter, though, is that some trading systems are actually hampered by using stops. I've personally tested quite a few systems of that sort over the years. They tend to be ones which are always-in and trend oriented. The bottom line is that you need to test things out before judging whether stops should be used or not.

Using too much leverage is the third option. This really falls under the category of having poor money management strategy. How much leverage one uses, by itself, doesn't necessarily mean someone is trading poorly. After all, a scalping trader who is only dealing in single-digit pip moves can employ high leverage without pushing the risk envelop, while a position trader could take way too much risk trading with relatively little leverage. It's all a question of taking the right amount of risk. Leverage is just what gets you there.

Buying tops and selling bottoms is the fourth option to the survey. I'm not exactly sure what the questioner is getting at here – whether he's talking about buying new highs looking for further upside or whether he's talking about just consistently getting in right before the market turns because they are too late seeing the move. The first one is basically a trend trading strategy choice and hard to argue against if the employed system tests out with a positive expectancy. The second, though, is reflective of bigger problems, namely emotionally driven "I don't want to miss out" trading with no real trading plan.

As for the final choice, news trading, that's definitely something I steer clear of myself. It is certainly true that trading in reaction to news headlines can be quite profitable, but it takes someone who is really locked into the market to do it well. You have to not only know what the consensus expectations are, but also understand how the market is positioned going into the news so you're not one of those folks asking "How come the market went down on the positive data?" Most folks just don't have the time or information access to be able to get news trading right on a consistent basis. For them it's little more than gambling.

The real worst way to lose money

A while back I wrote up a list of new trader pitfalls. At the top of that list was Avoid Errors in Order Entry. This has got be the most foolish of errors any trader can make. I mean all it takes is a couple of seconds to confirm your order entry to make sure no errors are made. There really is no excuse for losing money that way, but it's something which trips up traders new and old from time to time. Sometimes you get lucky and the error works in your favor. Most of the time, though, it bites you in the tail.

I hope you never make an order entry mistake of the sort that sinks your account. They do happen, however, and I would have to rate that as the worst way to lose 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.

Ever wonder who the best traders in the world of Forex really are? We’re proud to say we have over 100 of them. Today, we introduced an exciting new feature called the Currensee Leaderboard. It’s the first Forex trader Leaderboard that ranks the top traders in our trader network and shows annual returns, history and performance and risk scores. We’ve even created a Trader Authority Index (TAI), which is a proprietary algorithm that combines performance, risk and experience into a single Index . We rank our traders based on their TAI score and serve it up for the community to see in real-time.

We’ve created nifty levers where you can filter the top traders by currency, approach, trading region and other important trading factors. You can even define ranges of risk, return and experience to further refine your search.

Want to connect with some of these successful traders? Simply click on their name, check out their profile and send them an invitation.

Want to connect with the top traders on Currensee? It's members only, so sign up today. If you’re already a member, simply click on the Community tab and then click on Leaderboard.

There will be more enhancements coming in the next few months as we add additional trading functionality to the Leaderboard. For now, enjoy getting to know the top members of the network and let us know what you think.

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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.

1 Comment

There are a lot of fairly extreme positioning situations out there among the major currency pairs at this point – positionings which could impact on market performance in the weeks to come. With that in mind, I thought it worth comparing how the Currensee is currently positioned compared with the data from the most recent futures Commitment of Traders report. Granted, the later is about a week old at this point, but we tend not to see big changes happen super rapidly, so it should be an interesting comparison.

EUR

Currensee (EUR/USD)
COT Small Specs
COT Large Specs

JPY

Currensee (USD/JPY)
COT Small Specs
COT Large Specs

EUR

63% long by volume
57% short
77% short

JPY

52% short by volume
69% short
74% short

GBP

Currensee (GBP/USD)
COT Small Specs
COT Large Specs

CHF

Currensee (USD/CHF)
COT Small Specs
COT Large Specs

CAD

Currensee (USD/CAD)
COT Small Specs
COT Large Specs

GBP

78% long by volume
66% short
87% short

CHF

90% short by volume
50% short
66% short

CAD

53% short by volume
76% long
83% long

It's worth noting that only in the case of the JPY and the CHF is the Currensee community positioned the same way as the futures market. In the EUR, GBP, and CAD it is positioned in the opposite direction. This is something really interesting because it indicates pretty clearly that retail forex traders and the small futures specs (speculative traders) cannot be necessarily considered the same group as many would probably tend to do given their normal trading size.

It is also interesting because the large spec have a strong tendency to be on the right side of the trade. For example, in the EUR futures they got short in December and have only been getting generally more short ever since as EUR/USD has fallen.


This is not just a EUR thing. The large specs have been building their shorts in GBP over the same timeframe and we all know that cable has been pointed lower since December. They were their most long the JPY in the September to December period when USD/JPY was tumbling to 85, they were increasingly more long the CHF over the May to December period when USD/CHF was falling from 1.12 to parity, and they have been long the CAD since about this time last year, a span which has seen USD/CAD plummet from near 1.25 to near parity where we are today.

In other words, it looks like the Currensee community is currently mostly on the wrong side of things where the bigger picture trends are concerned – the ones to which the COT data relates. This could work out to the community's advantage if there's a sudden turn in the positioning of the large futures specs, but otherwise indicates that the retail trading collective is acting mostly in a counter-trend fashion.

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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.

1 Comment

In business school, we used to say "B's make degrees" but in the startup world, we don't settle for less than A's, and a B round of venture financing makes a lot more than a few degrees of difference.  With $8 million in B-round financing from North Bridge Venture Partners and Egan-Managed Capital, we're going to be able to do a lot more for our trader members, our investors and the Forex world.  Here's our top three:

  • Accelerate our expansion around the world. Forex is a global market and we're going to be a global business.
  • Develop Currensee Market Watch™ and other proprietary social indicators. We've been working on the first real-time social sentiment indicator that shows what traders are doing based on actual trades, which will also include  advanced data options, such as real-time market depth, and new customization features. You're gonna love it.
  • Drive the Currensee Trade Leaders ™ program. The financing will allow us to increase the velocity of the Trade Leaders Program, the first Forex social trade automation service that allows traders to follow the most successful Trade Leaders in the Currensee platform and create their own Forex investment portfolios.

Jim Moran of North Bridge Venture Partners joined our board during the A round, and now we welcome Travis Connors from Egan-Managed Capital to the Currensee board.  You can read their comments on investing in Currensee and the Forex social space in our funding press release.

This is no Oscar, and we're certainly not going to rest on our laurels, but we do need to thank our members - especially the early ones - for being there and giving us feedback and encouragement (and sometimes that other stuff too), and making the community happen.  You've told us how much you like the Currensee trader network and platfor and that what gives our investors confidence.  In the words of our CEO, Dave "El Capitan" Lemont,

“The Forex market is ready for change and we are now in an even better place to accelerate our international expansion and product development to bring that change to the market. We continue to bring trust and transparency to Forex traders around the world and we’ve already seen broad traction from the traders who have joined our trading social network over the past year. We are ready to advance the platform, take the trader network to the next level and become the primary destination for Forex traders.”

Watch this space for more exciting news.

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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.