Author Bio

Mamma mia! What a week it’s been in the currency markets. Let’s get right to it.

Italy dominated much of the ink last week as its prime minister announced his resignation because of the country’s debt crisis. Prime Minister Silvio Berlusconi stepped down Nov. 12 after Italy’s government passed crucial economic reforms demanded by the European Union. He was replaced by economist Mario Monti, who’s serving as premier-designate. Aside from Berlusconi facing scrutiny for scandals and failures during his service, Italy is in fiscal turmoil because the country’s debt is larger than the combined economies of Portugal, Ireland and Greece. Not to mention its bonds are shattering the 7-percent level, worrying financial officials as the world’s eighth largest economy could potentially spawn an unmanageable economic situation. There was some good news for Italy Nov. 14 when it sold some short-dated bonds via a sale that had been viewed as “a key test of demand for Italian debt.”

In Greece, the country named former European Central Bank Vice President Lucas Papademos as its next prime minister, hoping his experiences can help right Greece’s economic ship. Despite the turnover of Italy and Greece, nearly 80 percent of Germans believe both the euro will survive and Chancellor Angela Merkel is handling the economic crisis well.

In the U.S., hedge fund experts are already betting that 2012 will see more investors and shopping around for investments. According to the 2012 Preqin Hedge Fund Investor Review, 10 percent of investors plan to invest only with new managers in the new year while nearly 50 percent intend to seek new relationships. Unfortunately for U.S. retail foreign exchange traders, some new rules and strict enforcements are causing some trading restrictions. According to a LeapRate report, currency traders have shrunken to their lowest levels in years because new regulations and legislation such as the Dodd-Frank act that have limited trading and the amount of leverage brokerages can offer individuals. On the jobs front, September saw the most job openings in three years as employers advertised more positions during the month. Many experts are hoping that’s a sign companies may increase hiring. The U.S. Labor Department said businesses and governments posted 3.35 million job openings—a 7-percent increase from August and the most since August 2008. Some more optimism for U.S. jobs last week included the number of jobless claims dropping to 390,000—well below the 400,000 mark that analysts expected. Additionally, the U.S. trade balance deficit reported below expectations, hitting 43.1 billion—also well below the expected 46.1 billion. To finish positively, and celebrating the recent New York City marathon, successful long-term investors are being compared marathoners because “they must be well prepared, resilient, disciplined and focused” to go the distance.

• After ‘Frenetic’ Weekend, Italy Rushes To Limit Financial Damage, NPR, Nov. 14, 2011
• Europe’s Drama Is Far From Over , Wall Street Journal, Nov. 11, 2011
• Italy Senate Vote to Make Way for Coalition Government Led by Mario Monti, Bloomberg, Nov. 11, 2011
• Study: Hedge Fund Investors To Invest More, Shop Around In 2012, FINalternatives, Nov. 11, 2011
• New Rules, Strict Enforcement Curtailing US Retail Forex Trading -Study , Wall Street Journal, Nov. 10, 2011
• More Good News from the US, Forex Crunch, Nov. 10, 2011
• Job openings in Sept. most in 3 years, USA Today, Nov. 8, 2011
• Why Investing is a Marathon, Not a Sprint, Forbes, Nov. 7, 2011

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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.

Author Bio

Last week, Forex analyst John Forman hosted a live webinar about autotrading. John provided his perspective on what should raise some red flags for investors when they’re leveraging automated tools and strategies.

In a nutshell, John talked about the seven perils this type of service. While you can hear the entire webinar here, I wanted to give my thoughts on how relying on automated systems can affect your outlook as a trader and what you want to consider as a potential customer of one of these systems.

My interest lies in how these risks relate to currency investment programs such as the Trade Leaders™ Investment Program. The moves of the Trade Leaders, some of the top currency traders in the world, provide trade signals that appear in your portfolio. But, being prudent in your decision-making requires that you understand the process and why some methods can help you succeed, while others warrant more examination.

Briefly, the seven perils John shared were:

1.     Trading types (actual versus hypothetical)

2.     Knowing your skills and vetting traders/systems

3.     Managing risk

4.     Identifying fees and expenses

5.     Understanding presented performance and returns

6.     Accepting transparency and measurement

7.     Leveraging investor controls

In my opinion, the three most important of these are 2, 3 and 4. Ultimately, if you are comfortable in your abilities as an investor, are aware of the risks present in trades that might be executed automatically and can accurately understand how your returns and performance are measured, you’ll be well poised to take part in a system that offers you the benefits of autotrading. The biggest caution as you look to take advantage of an autotrading system is to know how the fees work. Are you paying on every roundturn? Is the “expert trader” getting paid on volume? Are you paying additional pips to add to the autotrading company’s bottom line? Buyer beware. Do your homework and know how much the service will cost you. Transparency is one of our key cornerstones of the Trade Leaders program. We made a conscious decision to keep our fee structure simple and straightforward and it’s clearly communicated in our marketing materials, on our website and by our team members who talk to new clients every day. You can see it for yourself here.

I welcome your thoughts on autotrading and the perils – or successes – you’ve experienced. What do you see as the most important consideration as you decide to try an autotrading system? I look forward to hearing 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. Investor returns may vary from Trade Leader returns based on slippage, fees, broker spreads, volatility or other market conditions.