Author Bio

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.

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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

I come from the retail brokerage world. A zero-sum game where every broker was always trying to one up the other guy all based on price. How low can you go was always the question the execs battled and price ruled when there was fierce competition for the same customers.

Price competition certainly continues to exist today, but what’s interesting is that brokers and other financial services players are finally catching on to other ways of differentiating. Some tout service, others executions, still others research and reporting. Zecco emerged in 2006 and announced Free trades and shook up the market. The big guys scrambled and soon everyone was offering free trades. What next? The emergence of forums, communities and networks was just beginning and Zecco realized that creating a trading community could help differentiate their offering.

Recently, Zecco announced that their CEO is moving out and the CIO is stepping up. The Broker News blog covered this news and talked about the trading community space with the new CEO, Michael Raneri. The reporter says,

“Aside from Scottrade no other broker has dabbled in the community space, and Scottrade is still a relatively small effort. Zecco may have an opportunity to play in the same waters as kaChing, Covestor and even sites like Currensee. And Ranieri agreed. The opportunity to tap into the wisdom of the crowds exists, and in fact Raneri used that term several times in our conversation.

Wisdom of the crowds, eh? Sounds right up my alley, so I went ahead and joined the Zecco community. A few things struck me off the bat. First, while it seems like a great idea to let everyone join the community without linking their brokerage account, I felt lost and confused. There I was in a community with a bunch of people with zero trades (see image) and zero faces (yes, that’s me) with not much to say.

I wasn’t sure what to do next so I started looking at peoples’ profiles. Most of them hadn’t done much or said much which supports Raneri’s comment, “The community tends to mirror the blogosphere,” he admitted. “Some are very active while 90% are just lurking. But what’s important is we can mine the community for data.”

I get it. It’s all about the data, sure, makes sense. But if 90% are just like me and just lurking, you only have data for 10% of your community. And, that leaves, in my opinion, a way-watered-down “forum-like” experience for the majority of people who haven’t fully joined and may never see the value because of their initial experience.

Maybe Raneri has some tricks up his sleeve to improve his community. We have found here at Currensee that a trading community is only as good as the activity of the traders. We are lucky to have lots of active members who participate in our trader network and add value every day. My advice to Raneri is, rather than focusing on building another free community, put your heart and soul into building a valuable trading community where people actively share ideas and insights based on real trades and real information. Hm, sounds familiar…

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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.

Author Bio

Ring the bell…The Currensee trader network is open for all Forex traders to join!

Today, we announced that our Currensee trader network – the first-ever Forex trading social network – is open to the public. For those of you who have been following our journey, you know that we spent eight months in our invitation-only private beta stage. Here in startup land, eight months seems to fly by more like eight weeks, especially when you are building the types of technology and collaboration features that take mere mortals years to build.

As I thought back to where we started, it seems like forever-ago that we invited 25 brave beta testers to try out our new idea for a trader social network. Our founders, Asaf and Avi, had a strong vision – they wanted to build a place where Forex traders could collaborate based on real trades and real data – but it’s hard to cook up a social network with only 25 people.  So we started inviting more, a few hand-picked Forex traders at a time.  And we started adding features and tuning our performance and analytics. We were lucky to have loyal and vocal members who spoke up when things weren’t working they way they expected or when they had a feature idea or suggestion they wanted to share. The product became more and more robust and more and more traders starting requesting invitations.

The Currensee team kept cranking out new features, programs, promotions, controversial videos and other Forex trader goodies. And, in just eight months, things are very different than they were on that chilly day back in February.  We have almost a thousand people trading together. We have an innovative product that combines the fun of a social network with the unique insights of strategies, performance and sentiment data…all based on the trader network. We started with members from two countries and supporting two brokers. In just eight short months, we have members from over 64 countries and support close to 40 brokers.

On behalf of the Currensee team, I want to thank all of our private beta members that joined before there was even a real product. We could not have come this far so quickly without your help and dedication to making Currensee a special place for Forex traders.

Today we leave the invitation-only private beta behind us and throw the doors open to the world.  We invite you to join our unique trader network and see for yourself what makes Currensee the place to trade together.

When my friends ask me about what makes Currensee so great, I always talk about the open collaboration we bring to the world of Forex. That we’re changing the game by giving all types of Forex traders the ability to connect with one another, see live trades and positions and share strategies, ideas, victories and their losses. We call it transparency and Trading Together is how we make it happen.

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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.

Author Bio

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!

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.