Tag Archives: forex community

Modern Portfolio Theory remains a major part of many investment portfolio allocation processes. Basically, the idea of MPT is that one can combine a collection of securities into a portfolio which offers comparable return prospects with reduced risk. This is done by mixing together stocks and other assets which are not well correlated, or perhaps are negatively correlated.

Sounds good, right?

The problem is, as has been discussed, that individual stocks have become extremely highly correlated to the market in recent years. This, by definition, means they have become increasingly correlated to each other as well, reducing the opportunity for diversification in portfolios using the old methods.

Another issue with MPT-based portfolio development is the fact that correlations change over time and in different time frames. The chart below from Oanda shows a recent set of correlations between EUR/USD and other currency pairs (as well as gold and silver).

Notice in the AUD/USD column how the correlations to EUR/USD are strongly positive (darkest red) in the hour, day, and week time frames, but then are uncorrelated in the longer time frames, and even negatively correlated at 3 months. In the case of USD/JPY we can see the correlations are very time frame depended, running the full spectrum over the time frames. Even with silver and gold (XAG/USD and XAU/USD) the correlations aren’t consistently strongly positive.

All this correlation variation creates considerable challenges to standard asset allocation and portfolio development methods and approaches. Imagine creating a portfolio of stocks that have been properly minimally correlated only to have them all become highly correlated? It would totally change the portfolio’s risk dynamics, and likely at the worst possible time.

This is where the importance of considering diversification not just in terms of markets and securities, but also in terms of trading/investing approach becomes clear. This is the approach of fund-of-fund investors. They seek out uncorrelated money managers, exactly the same sort of thing you can do by taking part in the Trade Leaders program.

Remember the old saying “tis better to give than to receive?”  This is the entire basis for how Currensee works.  Strangely, it is a beautiful thing. We are completely dependent on traders sharing their real trades, strategies, and even their performance.  I guess we run into a person now and then who says, "Why should I share? What am I going to get out of this ?" (I guess those traders have figured out how to make money on their own – LOL) but the vast majority of our community just gives and gives and gives.  And they  get quite a bit back.  The more friends they make, the more trading ideas they see in their position table.

The Currensee position table

All the details -  the pair, entry position, entry time, margin used, stop loss, take profit, the strategy behind the trade and any charts that back up the trade and even if the position is winning or losing. This picture shows only half the information that's available in the live platform.

The magic is that the more people you invite to share your trading information, the more trades you see and the more people you can collaborate with.  Because if any of these positions change you are immediately notified and that is pretty handy when you have opened a similar position and you are away from your trading platform.  You can talk to the trader you re sharing with via chat or Skype and really work as a team to determine if it's time to get out or holding on is the right thing to do.

So why are hundreds of traders sharing like this?  Is it because the service is free or we found all the good people in Forex….or is it because we are all social animals?  We need to express ourselves and connect with one another and what better way than thorough a common interest, whether it's the way we supplement our income or make a  living or with something we just love to do.  So if someone asks you why would you share your trades on Currensee….just smile and ask them what they would like for Christmas or Hanukkah, or Kwanzaa….

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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.

So you are alone in your basement in Johor Bahru or Barcelona or Brooklyn, and you really would love to know what other traders that look at the market just the way do are doing right now. You want to find someone that trades the same session as you, Asia, the same pairs, EUR/USD and  EUR/GBP, and uses Technical Analysis and Fibonacci to analyze the currency markets, and since you've been at this for quite a while, you don't want to talk to a newbie but want to collaborate with someone with at least four years of trading experience.  Finding like-minded Forex traders has never been easier.And yes I mean real Forex experience, someone who really trades currency.  Not someone in a demo account but someone who is an active trader and has the scars to prove it.

Open up the community page inside Currensee.com and you will see a bunch of happy traders' pictures and  some notations of the number of real trades and the number of members in their virtual trading team.  At a glance you can weed out the talkers from the real traders. You can scroll page by page or use the handy filter to sort the traders to find someone that is very compatible with your trading style.

Now you have a short list - read the bios, see their trading activity, maybe take a peek at their performance and find someone on a similar skill level and then go ahead and then take the plunge Send some invitations to some lucky traders to trade together with you.  As soon as they accept you won’t be alone in your basement anymore, you'll be collaborating on real trades with real traders on Currensee.

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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.

Today in Currensee's community, there's a good discussion on the USD/JPY.  Marcie wrote that she may have gotten in at the wrong time and asked the community what to do.  So far over 60% say "get out now, it's only going to get worse" but the discussion is still going.  Read the whole thread and vote in the poll at Currensee.com

USD/JPY poll

As of this morning, 68% of the Currensee Forex community was long in this pair and losing.  I wonder if that's the same group telling Marcie to get out now?  Will made an observation about Support and Resistance points.  The community volatility widget shows support points a bit below the current USD/JPY price so maybe there's still hope for the long side.  Only time will tell.

Community volatility

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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.

2 Comments

Well I guess the Currensee marketing department is up to their old tricks again. Naughty must be in their genes. I took the team to task on our last, shall we say, “provocative” ending for our video Currensee.com: Forex Trading and asked the team to develop an ending that was more in line with the serious financial research and analysis bent of our Currensee community. Please let me know if you think we got this one right. http://www.currensee.com/itsabeautifulthing/

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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.

It's not often you get the unique opportunity to build a product from scratch. Work with smart people, push the limits of technology and build a truly innovative product that creates excitement in the marketplace. Our private beta continues to be an amazing journey and we are now really starting to see what happens when we connect our vision with the reality of real users. Doesn't get much better than that.

I want to share with you the memo I sent to all Currensee traders yesterday in conjunction with our latest release. Why? At Currensee, it's important to us that we're open and transparent - the same way we want our traders to be open and transparent about their trades and their performance. We know the Forex industry can often have a bad rap, sometimes for good reason. We know you've heard them. Get rich quick promises, behind the scenes schemes, even the old bait and switch. We think this really stinks and that's why we're changing the game. If you're tired of the same old Forex same old and ready to experience the Forex trader network that will change the way you trade, go ahead and request your invitation to our private beta. And now for a word from, well, me.

Memo to all Currensee members, May 27, 2009:

First off, let me start by saying thank you. Your participation in the Currensee private beta has been amazing and your continued feedback and dedicated usage of the site brings new insights and ideas to help us grow the platform. Our ability to move quickly and make considerable progress with the product is largely due to your ongoing suggestions and willingness to partner with us along the way. Our vision of providing a trader network where active traders like you can share real trades, strategies, celebrate their successes and gain new insights into the market is truly coming alive before our eyes.

As I’m writing this note, I am humbled by the overwhelming response to our private beta. We have thousands of traders who are eager to join Currensee and it is an exciting challenge to build an exclusive Forex trader network. We continue to invite new traders join our network everyday – that means new traders for you to connect with, learn from and share ideas with. We’ve found that members who have 5-7 traders on their virtual trading team tend to have the best experience on the platform. So, we encourage you to reach out and invite the new traders that join our community and look at the market the way you do.

Now, let me tell you a bit about a release that’s going in tonight (live as of May 28th) and some of the new features and improvements you’ll notice when you log in later today. First off, we made a series of performance improvements to the positions table and to the dashboard page. We know how important the positions table is to your Currensee experience and we strive to ensure it loads quickly and accurately each time you view the site. Our work here is never done and the positions table is something we continually monitor and make enhancements to on a go-forward basis. We also improved the sorting of your Virtual Trading Team in the top left of the dashboard and you’ll now see anyone who’s currently logged in at the top of the list. For those of you using Internet Explorer, we’re working on improving the IE7 experience and are addressing several IE8 issues. These will continue to improve in the coming weeks.

We also heard from you that you’d like to see more dynamic content on the platform. Well, we’re happy to announce the roll-out of exclusive new content from Thomson Reuters. As a member of the Currensee community, you’ll have access to news feeds that are updated three times daily. They include: Market Opens providing general news, Economic Events and a commentary on the major currency pairs. You will be able to create discussions on this commentary to get the community’s take on these new market analysis tools. In addition to the Thomson Reuters content, you will also begin to see the long-overdue Help feature, giving you access to more information about the features of the platform. We are conducting a special webinar with our Co-Founder and VP, Product Development, Asaf Yigal on Monday, June 1, 2009 at 4pmEST. Asaf will walk through the new Thomson Reuters features and discuss the enhancements that were included in the latest release. Space is limited, so be sure to save your seat today:

Monday, June 1st at 4pm EST
https://www2.gotomeeting.com/register/293373202

Let me close by thanking you once again. We believe that we are creating a trader network that will change the world of retail Forex trading by creating a rich experience for traders to share and collaborate while making trading more fun and exciting. We know that you have endured some bumps and frustrations along the way and we appreciate you hanging in there with us. I also wanted to send out a special apology for anyone on my virtual trading team that that made the mistake of following my numerous losing trades last week. It was a brutal week for most of our traders but at least we have each other, right?

Please do not hesitate to reach out to me at dave@currensee.com with your comments, questions or suggestions – whatever they may be. We may not be able to make every improvement immediately but I assure you, we will be listening!

Happy trading!
Davesignature

Dave Lemont
CEO Currensee

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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.

3 Comments

Thanks to Samuel Araki, Co-founder of Trading Post Financial Services, for his insightful post last night on the complexities of fostering collaboration between Forex traders. I'd like to add a bit of insight to his analysis of the Currensee community. At Currensee we are all about connecting traders to traders they trust; novice, intermediate, and expert level traders based upon their view of their experience and real time connectivity to major brokers.  When you join the Currensee community (closed-beta signups are open now!) you can complete your profile based upon your own trading experience, habits and style. Traders can chose to collaborate together to enhance their trading experience and leverage the wisdom of the trading community. We are broker agnostic and don't offer trading advise, and of course we're compliant with all NFA guidelines.

We consider ourselves unique in the marketplace as the only social networking site for FX traders based upon real-time actual positions. Here is a snapshot of what we will offer when we launch in 2009:

  • Join or form virtual trading teams – trade and strategize with peers, share price charts, participate in posts & polls, and gain recognition within trading teams and the community
  • Gain powerful market insights - through a new set of social indicators that measure market sentiment, volume, and depth of currency pairs
  • Gain recognition within the community based upon actual trading performance

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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.