Author Bio

One of the things that I’ve noticed of late on the “Hot Topic” discussion board on Currensee is the passion and enthusiasm that members of Currensee have towards trading foreign exchange.  That is fantastic.  To hear people discuss anything with passion, besides sports, now-a-days can be hard to come by.

There are obvious reasons for this as well.  Greece, Spain, Italy and others are making headlines because of their budget woes.  The unemployment rate for the youth in Spain is 40%!  There are just too few young and old people utilizing a craft or a skill out there ‘pounding the pavement’ to get others to listen and buy into there message.  I remember when a friend of mine (about 20 years ago) would not stop talking about the merits of the information super highway.  She worked at AOL.  I was too focused on losing sports teams to take time and buy into her message.  Others did though and we all know how AOL blazed a trail that set the stage in the technology sector for other young passionate technology gurus to follow.

What group should have the most passion towards trading FX?  Professionals, right?  If your next paycheck depends upon either producing returns for investors or trading for yourself then I’d assume that you would be well versed in all news forex and be utilizing a time-tested strategy to produce those returns.

How did these professionals do last year?  Per the Barclay Currency Traders Index the average return of 124 currency programs was +0.63% last year.  If you ask me that is basically benign performance.  I mean stocks in 2009 fell excessively and then rebounded maybe even more excessively and volatility is what excites traders.

Well how about pre 2009 when forex programs were not able to sit on the sidelines and root for 0% returns as stocks and bonds were performing better?  In the 2007 and 2008 the average return was 2.59% and 3.5% respectively.  Not bad.  Without seeing all the stats you can gather that the standard deviation of returns throughout the year was much lower than what was going on in the stock market.  Still those aren’t great returns right?  A blindfolded dart thrower might be able to do better just by  buying or selling EUR/USD and not paying attention for a few weeks.

Looking back further though will yield different results.  In fact since 2000 the average FX program yielded an accumulated 32.3% return for the decade.  Now that is better than the perennial 10k in the Dow Jones!  In the ‘90s the average FX program yielded an accumulated return of over 108% and in the ‘80s the average return was over 17% per year (the index started in 1987).

Are those returns gone forever in forex?  I humbly suggest that they are absolutely not gone forever.  There are just too many PIIGS (Portugal, Italy, Ireland, Greece and Spain), emerging markets and other worries to believe that we’ll be in a low-vol forex environment forever.  Are those handsome returns coming back tomorrow?  I certainly don’t know but one thing is for sure is that there are passionate forex traders that will certainly be looking for returns 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.