Trade Leaders

At the end of last year, Forex Magnates connected with Dmitry Orlov, one of the pioneers of the PAMM accounts industry, to learn more about his opinion on the
copy trading
market and to gather some details about his new venture, Strategy Store. ... For trader: normalized strategy comparison, “fake strategy” is easy to identify; for investor: no order latency issues like in
mirror trading
services, all investors are equal, plus money management tools to control investment risks and “personalize” trading strategy; for broker: ...

Read the original article at Forex Magnates

What the Eurozone does about an inflation rate of 0.5% was not resolved last week after the ECB meeting, but we are likely to see the debate continue into this week, which is likely to keep the single currency on its toes. The head of the ECB, Mario Draghi, heads over to Washington for the World Bank and IMF spring meetings, which is always a time for reflective debate and discussion of policy options for the future.

Read the original article at Forex Crunch • Trade Forex Responsibly

OANDA, a global provider of innovative foreign exchange trading services, is pleased to announce the launch of its copy-trading investment service, the OANDA Trade Leaders Program. Following the acquisition of Boston-based Currensee Global Inc., the OANDA Trade Leaders Program integrates the strength of the two engineering powerhouses.

"We will continue to innovate on this offering, including adding additional trading instruments such as precious metals; our offer will be unparalleled in the forex industry." - Vatsa Narasimha, Chief Strategy Officer and EVP, OANDA Corp.

Read the original article at newswiretoday.com

FXstreet.com is organizing a special webinar together with Currensee Trade Leader Taylor Growth, tomorrow Thursday at 15 GMT / 10 am EST!

Tom Dawson and Josh Colton

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!

REGISTER NOW!

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.

REGISTER FOR TOMORROW’S WEBINAR ON FXSTREET.COM

A few weeks ago, one of our contributing writers, John Forman, posted on when the best time of day to trade Forex was. The question was inspired by the Q&A session of our last Trade Leader webinar featuring Currensee’s Taylor Growth, who explained the benefits of using a conservative Forex trading strategy.

Recently, we were able to get some insight on this question from another Trade Leader; Gabor, Asirikuy Trading. Gabor trades using a technical strategy based on indicators such as Chart Patterns, Bollinger Band, RSI, Stochastics.

Gabor says:

“It depends on the currency pair. The rule of thumb is that the bigger the liquidity of the market, the better to trade it. Liquidity is changing during the day even for heavily traded pairs. E.g. the London session is considered to be the best time to trade the European majors (EURUSD, GBPUSD, USDCHF). Big liquidity does not necessarily mean directional price movement - we can experience the formation of congestion zones many times during liquid hours. But when balance between bulls and bears is broken during a highly liquid period, chances are that it is going to be a meaningful movement, the beginning of a trend.

To support my statement, I examined one of the short-term trend following systems that I trade at Currensee.

It's a momentum-based strategy, which trades the H1 EURUSD. If price momentum reaches a certain threshold, the system opens a market order in the direction of the momentum. In other words, if the open/close of the hourly candle is bigger than a preset % of the daily volatility, we enter the market. I ran a simulation of 12-year price data and then grouped the market entries by hour. The result is shown on the chart.



As you can see, most entries are in the overlap of the European / US sessions which starts in the range of 1 p.m. GMT (New York) - 2 p.m GMT (Chicago). This lasts to the last hour of the London/Frankfurt session,  5 p.m. GMT. The Asian / European overlap is the second most busy period from 8 a.m to 10 a.m GMT.”

It is interesting to compare this response to that given by Trade Leader Taylor Growth. Since he is a range trader, he feels that the lower trading volume in the NY afternoon, Asian, and early-European sessions yield the highest success rates. He explained that the best time of day to trade really depends on the strategy the trader is using. Since his conservative strategy is very technical, it fares better in Asian sessions when trading European pairs. Since it’s nighttime in Europe while the Asian markets are most active, no European news releases are making their way out and influencing trades.

To see how these two Trade Leaders’ trading strategies have been working for them, check out the Leaderboard.

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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.

In the webinar a couple weeks ago a question came up from one of the attendees as to when the best time of day is to trade. This is a question that comes up a lot among forex day traders, though obviously most folks who seek to operate in that arena are constrained by the time zone in which they live. I’m going to present two distinctly different answers to the question – ones that contradict each other.

First, conventional wisdom
When the question of best time of day comes up the answer often put forward is the London/New York overlap period. The reason here is a combination of volume and volatility. London is the center with the highest average forex market trading volume, and New York comes in second (see The Most Traded Currency Pairs for specifics on which pairs are the most active globally and across regions). As such, there is maximum liquidity during this time of day for the major traded currency pairs.

On the volatility side of things the London/NY overlap is also the period when many of the most significant data releases and news items are released. Obviously, the NY morning is when most US data headlines post. Most UK and European data hits before NY gets going, but central bank statements and press conferences do happen in the NY morning. Also, key speakers often have their comments crossing the wires during the overlap period. In other words, there is a lot of news and data to move the markets and create volatility.

Thus, the London/NY overlap period offers volatility and liquidity, which many folk see as keys for worthwhile day trading. But wait!

Performance reality
The folks at DailyFX did a study a few months back looking at the performance of FXCM clients based on the time of day they traded. The results they came up with were entirely contradictory to the conventional wisdom noted above. They argue that it’s the lower volume NY afternoon, Asian, and early-European sessions which see the best trader performance.

Why so?

The author’s argument is that most individual traders tend toward a range-trading approach. This style of trading is ill-suited to volatile markets. As such, the news and data induced volatility we see in the London/NY overlap period is actually a negative for trading in the major pairs. They include a graph which shows a clear trough in the success rates of trades in the NY morning and another that shows the relative volatility peaks at that time of day.

Now, as I wrote in Optimize trading performance by time of day selection, there are some issues with the DailyFX article in its focus on win % as its main metric. The authors did include some system performance figures which provide some more results to back up the overall premise, though. As a result, I think it’s worth at least taking a very hard look at how your trading would do in different time frames during the day.

Makes you have to start wondering about conventional wisdom, doesn’t it? It should also have you thinking about opportunities to diversify your trading time of day. This may not be something you can do yourself because of your available time and locale, but using an autotrading system might offer you an opportunity to do so.

Editor’s Note: Originally derived from the webinar, the question examining what time of day is best to trade Forex had been answered by Trade Leader Taylor Growth during the Q&A session. Since he is a range trader himself, his response was congruent with the second part of the above answer, which leans towards the lower volume NY afternoon, Asian, and early-European sessions as yielding the highest trading success rates.

Taylor Growth explained that the best time of day to trade really depends on the strategy the trader is using. Since his conservative strategy is very technical, he believes it fares better in Asian sessions when trading European pairs. Since it is nighttime in Europe while the Asian markets are most active, no European news releases are making their way out and influencing trades.

Last week’s webinar session featuring Currensee Trade Leader Taylor Growth delivered strong information on a “conservative” trading strategy and its pertinence to these current tempestuous market times. The concepts touched upon and insight provided could be quite useful to anyone involved in Forex, so I thought I would share some of what was revealed.

With a historical success rate in the high 90’s and currently up 1.5% this month, Taylor Growth seems to be doing something right. Tom Dawson, COO at Taylor Growth who spoke on the company’s behalf, attributes this success to a few key concepts: preparation is integral, you must consider multiple sources of influence like technology and the economy, and you need to have rules and systems you believe in.  Not long ago, the world of Forex was something new and uncharted – an environment he compared to the Wild West.

“There was a need for a conservative, careful, and productive company. One that was going to do a good job in producing real results that were accessible to people,” Dawson explained. He went on to say how it’s easy for someone with millions of dollars to achieve world-class results in Forex, but it’s a completely different story when you can only put 10K into the market, and that is why skilled traders are needed to help in attaining these results. Dawson finds solace in knowing that even though it may not seem it, there is in fact consistency in foreign exchange.

“One of the great things about Forex is that every month, companies all over the world have to move their money to do things like pay rent, etc. It’s the daily moving of this $4-5T that acts as a stabilizer bringing things back to equilibrium,” he explained.

By using range trading and understanding that over time, there will be various ebbs and flows in Forex, Dawson sees that no matter where a currency goes, it will usually always return back to its point of origin. This general paradigm of consistency is what inspired Taylor Growth’s goal of being able to achieve the highest risk adjusted return possible while producing smooth results – or, as Dawson put it, “taking the chop out”.

He explained how the use of Pattern Recognition when looking at what’s going on in the marketplace allows this consistency to actually be seen. It becomes apparent that there are repeatable, definitive patterns that occur, such as how the dollar is stronger and weaker at different times of the month. Taylor Growth has seen such a high success rate because they pay close attention to these patterns and base their decisions on them, which is something that’s hard for a computer to do.

Even with Taylor Growth’s scrupulous attention to macroeconomic detail, there will always be some degree of risk. Knowing this, he’s formulated a few ways he believes are the most secure for protecting investors from losses. Setting automated stops is not something Taylor Growth generally practices. Instead, when things start moving against them, they cut the trade themselves as a means of managing risk. By using a balanced combination of betting small, understanding which patterns are in confluence with them, and being comfortable with taking a loss when a trade moves within several hundred pips, Taylor Growth has achieved a historical success rate in the high 90’s. On larger trades, however, they do set hard stops to abstain from risking more than 1%.

One deterrent of automatic stop losses Dawson touched on was the way they can react to a Flash Crash.

“Problems can arise when a market is thinly traded at a particular time and if it moves up or down 200-300 pips, you run the risk of losing the trade because of the stop, even though you were correct. If the stop weren’t on, you would have eventually won the trade,” he explained.

The webinar was concluded with a Q&A session that touched on topics such as stop hunting, among others. Our next webinar will be taking place Wednesday, May 9th 2012, 12:00pm ET / 6:00pm CET where CEO Dave Lemont will reveal five secrets of investing in the growing Forex market - sign up here.

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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.

It has been quite an exciting day here at Currensee as we’ve been receiving generous coverage on a press release published this morning by the Wall Street Journal’s Market Watch. The premise of the piece highlighted how Currensee’s Trade Leader Investment Program has grown to include over 100 institutional partners who are currently offering the program to their investors and clients.

It is interesting to look back over the timeline beginning at the programs initial inception back in October of 2010, when it was available only to retail investors. It wasn't until roughly a year later that we started providing institutional investors the option of offering the program to their clients, which include asset managers, hedge funds, family offices, introducing brokers, and other financial institutions.

The press release also illustrated how the relatively new realm of online trading platforms are reshaping the way trading happens by allowing investors some degree more control. Javier Paz, senior analyst of Aite Group, explains some components that have contributed to the monumental shifts in forex trading.

"The abundant liquidity of the Forex markets has given rise to a new breed of professional-level traders. This development, along with the popularization of trade-replication technology and prudent copy-trading rules, are the biggest developments in institutional investing since the creation of hedge funds."

The press release definitely brings into perspective just how much this facet of trading is adapting to available technology as a means of improving the way forex investors navigate the world currency markets. Thank you so much to MarketWatch, Elite Group, and the many others who found this information worthy of posting on their blogs and sites - we really appreciate it! Find the full press release here.

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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 is our fifth and final installment of the trade leader interview series. In this post we ask three of our Trade Leaders what they think about volatility, trading strategies and the Euro. The traders are Janus Investments (Ticker: JASMI.I), Chen Investments (Ticker: CHCMP.S) and BAK Trading (Ticker: TCBRF.A).

Janus Chen BAK Trading Currensee

 

1. Do you believe 2012 will be as volatile as the end of 2011?

Janus: 2012 will bring more volatility than 2011, but in a smaller range than 2010 and 2011, because central banks will intervene to dampen volatility trying to set upper and lower boundaries.

Chen: Yes, it will be more volatile.

BAK: Yes, but volatility will only be 60-80% as 2011's ending months. The most volatile period is probably already over.

2. What types of Forex strategies will continue to prevail in 2012?

Janus: A portfolio of different non-correlated strategies will work in any market.

Chen: I think any strategies which can live well in 2011 will still have a chance in 2012, but we have to adjust our strategies to suit a riskier market.

BAK: Scalping and swing. Position trading will not prevail in 2012.

3. What would a breakup of the euro mean for your strategy?

Janus: No change, our strategies are not based on long-term trends (monthly, yearly), but on short-term price action (intraday).

Chen: This is something tough for us to think about. I feel the only thing a trader can do is have proper "stop losses" in place.

BAK: Not much as I only focus on ultra short-term changes of major pairs. The Euro currency should still be around, at least for Germany, France, and a few other countries.

 

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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.