Sympathique Forex

Profit, you said profit?

2008-03-05T17:44:00.002+01:00

Well, that smells like some profits here...
Yes, some good news this week : Pegasus is making money, LJW #4 is making money (though frankly it will take me some time to forget the huge recent DD, almost 50%)... My EAs are also making good money, but that's because of my hard work on them ;-)
On the MA front, let's start with the good ones : Dev is still amazing, he trades slowly but surely and he made almost 6% in Feb. That's good, considering where the others are.
Galleon is making a truly awesome comeback, they made back more than half of what they lost in a few days. Not bad guys, just you'll have to find ways to avoid such DD in the future. On the other side, IPAM Select is still losing money very regularly, almost like a clock. Don't know what they do there, but it would be time to react guys, I've almost lost half of my investment now!!
Finally, Sentiment... Well, don't know about that one. Still good money management, still serious broker, but they seem to not be able to go out of the hole they are in now... Wait and see!

P.S. : for the EA fans, send me a mail and I'm sure I can share some good stuff with you!

A quick update

2008-02-21T19:07:00.002+01:00

Already 3 weeks since the last update... What happened in the meantime?
Well, can't really say things got better!
* Galleon : I start to believe it's a scam! Can't know how those guys made money so far, because right now all they seem to do is constantly lose some every day. $ is up? Galleon is down! Markets are down? Galleon is down! Markets recover? Galleon is down? Amazing!
* IPAM Select : well, exactly the same as above indeed... Never made any profit on this one. And powerforex now have another system on FXCM that never existed before, but this one is beneficial. That smells like scam also, if you ask me!
* Sentiment agressive : well, that one is keeping its head up, but no miracles there neither... I'm down 15% since I opened it, not really bright!
* Devrim : NICE! Only a few weeks with it, but I see profit there... It's a breath a fresh air compared to the ones above!
* LJW #4 : well he got out of a big drawdown, and is now a bit positive, but not sure it's because of his skills... Anyway, good to see some green there too!
* Pegasus : bit depressed at the moment, but still in positive
* Nocturnal : so far not impressed, a bit negative at the moment, nothing dramatic though!
* EA portfolio : I started live a few weeks ago, so far around 0 but promising!

And what's the outcome of all the above, after 3 month of forex experience? For the MAs, clearly, pick up your choices carefully, consolidate only on the best and this only after a few months of experience, and cut your losses (pull the plug out) quickly!

In the pipe too...

2008-01-28T22:16:00.000+01:00

Another MA in the pipe as well : 007 from bestfxtraders.com. Very little info known, but the trader seems pretty good, and his record speaks from himself as well. He claims to have an 5 to 7% per month performance with the leverage level he uses, and a 7% drawdown peak to valley. Well, that's good!
Let's see how it evolves...

Recovering?

2008-01-27T18:02:00.000+01:00

Waow! What a tough week it was... Bit of a crazy week really.
Well, the good news is that my MAs are slowly recovering. Sentiment is back in positive for me after a long down, and Galleon and IPAM are still way low but heading north again. Let's hope the recovery will be quick and we won't see such huge drawdowns anytime soon. One thing for sure : I won't put a penny anymore on Galleon and IPAM until they make me at least a +30% from my initial investment...
Zurich-1 : well, good I didn't make the step then... Seems to be down very low.
I opened a DEV account with Sha - long process, PFG is really slow and messy, but Sha and the team helped a lot. DEV seems steady so far.
LJW-4 still with huge opened drawdown, but not taking the pain of closing the position. Suppose that's his style... Not too good for me neither!
Pegasus trades like a God, went through the week practically untouched, what a trader!
Bogie EA bad those days, but I don't give up... and I'm searching for other EAs : Touch the Sky - see Electric Savant's blog, bought it on Ebay for peanuts, but not astonished by results so far. Pipforia : gotta check those guys, good results on website, but you know... And 80$/month is a steep price for an EA!
Also searching for new MAs : Will enter Nocturna Large fund A as soon as paperwork is done, and checking a few others. I have 2 serious candidates but with 25k or 30k minimum. That doesn't work for me : I can put 30k over time if performances are good, I won't pay 30k for an experience that may turn bad very fast! One of the candidate is the SkyTeam, or SkyFX Team, that had stunning results in ATC 2007... Too bad their min is 25k. Anybody knows them?

Bleeding continues...

2008-01-08T20:49:00.000+01:00

Galleon starts to really worry me : I'm now down 13% from initial investment - bad, isn't it?
On the other side, Sentiment agressive and IPAM Select are back up - almost back to 0% for IPAM, a bit positive for Sentiment. At Oanda, High risk realized its P&L so we're up more than 10% there (but minimal amount), but LJW #4 is still down a bit...

I've also started an experiment with an EA (Expert Advisor) - for those who don't know this, this is a kind of robot that trades for you on a software called Metatrader. When certain conditions are met, the robot enters and exits the trades. Basically very similar to what a lot of MA managers do, just here you can control everything.
Well, I found out that experimenting the work of the 2nd place winner from the Automatic Trading Championship 2007 couldn't be such a bad thing... So I rented the EA from Wackena (available to rent for 50$ / month), I started it yesterday with a small account at Alpari. So far nothing great there neither... I'll keep you posted!

A pretty bad start!

2008-01-04T16:37:00.000+01:00

Hello there!
Happy New Year to you all, I wish you a nice 2008, may you all become youg pensioners! Hey well, careful what you wish for.
Might take some time anyway, since all my MAs are having a VERY bad year start... Let's see what we have :
* Sentiment (account opened on 23rd of Nov 07) : I'm back to 0% win, after having seen an equity increase of almost 10%. Bad...
* Galleon (account opened on 1st of Dec 07) : also back to 0% win... Too bad, I was up 20% at some time!
* IPAM Select (account opened on 10th of Dec 07) : down down down, I'm down more than 10% now.
* LJW 4 (account opened on 20th of Dec 07) : Down a bit, 5% or so...
* Pegasus high risk (account opened on 18th of Dec 07) : the only one working very well nowadays, too bad I only have a few pennies there... Because it's up more than 15% at the moment, although it's unrealized P/L.

Voilà, the stat of today hurted my MAs badly - as well as my stocks, by the way. Bad bad day!

What do I have so far?

2007-12-20T13:31:00.000+01:00

So I started searching. Google, forums, blogs, same way you'd search ofr your next car, TV or house. Except the market is smaller, of course! And I strongly encourage you to do the same, before anything else.
And you won't find the silver bullet. Rather a good collection of normal ones. I encourage you to do so, in order to mitigate the risks and smoothen your equity curve. This is clearly your best chance to make regular money and avoid going bankrupt because 1 trader failed you! I'd advise at least 3 funds, but 5 might be better if you have good candidates and your risk capital allows - which doesn't mean that you should subcribe to underdogs just because you need to diversify.

And here is what I have so far :
* FXCM Sentiment Agressive. Probably one of the best fund out there, mini of 5000$ now, run by one of the biggest Forex broker. Very impressive returns, good money management, drawdowns seem quite controlled.
* GalleonFX. Well, this one has got a much bumpier history, but I like their persistence and honesty. Mid to long time returns are OK
* IPAM Select. Despite a not too good reputation, their funds seem to perform quite well. IPAM Select has had really good months recently, and I cannot complain so far...
* LJW Fund4. Only very small amount there, risky trading but amazing returns so far. To be monitored closely.
* Pegasus High risk. Very few information available on this one, so it's hard to comment. I only have 250$ there, it's really just to try as well.

What is in the pipe :
* DEV account from Sha, also known as Devrim in other places. Regular performance seemingly, results are not highly impressive but good, and money well managed as it seems. Will probably be the next one I open...
* Team Aphid Bird : a really good team delivering solid, but not amazing, returns with limited drawdowns. They offer managed account from 25 000$, which is too high.
* Tecnofinanzas, good signal provider. I might take those 2 into a FXCM system select account.
* Zurich-1 from http://www.managed-forex-accounts.info/. Seems good, but I couldn't get any info / feedback on it from anywhere else.

And searching...

Soon here : performance update on the systems above!

And then came managed accounts!

2007-12-20T13:03:00.000+01:00

So we're searching for high-profit (thus high-risk) managed account type of opportunities... In this field, if you are not 1M$ net worth, you're basically a very small fish and you are of no interest for the major players. With one exception : forex.
Did you hear the name already? Stands for foreign exchange. Currency market, in a nutshell. Forex is a little bit the wild wild west of finance, if I might say. Few rules, still small players, everything is possible type of country. If you're not too risk-adverse, chances are you will like it.
Forex is a paradise for traders, with a few drawbacks. Let me first explain you why it's good :
* High leverage - you can start small and still make money
* Very flexible trade size - if you want, you can risk, say, only 20 bucks per trade.
* Ultra liquid market - you always find sellers and buyers for the main currencies
* No up or down - currencies depend on each other, and are not meant to go up like stock market, if you see what I mean.
And bad? Well bad for loads of reasons, one of them being that leverage means risk. Others are mainly linked to the regulation fo that market and its inner structure, and it would take us too far...

So, why did I mention forex? That's because this is the place where you can get those smart guys interested in your money even if you don't have a couple of millions to put in. In certain cases, 1000$ will be enough.
First question : why? That's a goood question. My view is that forex market is "simple" and accessible enough that a lot of traders enter it, and if 95% fail, you still have 5% that are doing good and can share it. I suppose... So small traders are able to maanged funds quickly.

And that's good for us, lazy / stupid / not gifted people. Because we get smart people to trade our money for solid results. And let me say a few words on results : what you will usually see is a high single digit monthly ROI gross of performance fee - which are somewhere between 20% and 30% generally. Yes, you read well. Your 10 000$ could make you a 500$ net / month, before taxes. How does that sound?

Well, let me tell you what the answer is : it sounds too good to be true, and often is. Usually, traders advertize their performance without telling you where it comes from (backtest, demo, real clients?), who can certify it... It can sometimes be very dubious. And then come the losses - yes, no profit without loss, what did you expect - and their control. The trading style. The mental side. Will the trader resist pressure, not caveat when it gets hard? Those are important questions.

Personally, as a rule of thumb, I accept to lose up to 20% of invested capital before panicking. That is when I have full trust in the trader. Which doesn't come overnight, right? Just be aware that this kind of drawdown (20%) is not unsual at all, and worse can expected. So, as everyone will tell you : carefull there, only put "risk money" there, don't sell your house to put it in forex market, that's the best way to ruin!

So the whole challenge is to find well-managed, solid, proven and constantly performing traders to manage our hard-earned money. Difficult? Yes! Costly process? Yes, because we will have to test some accounts that will fail miserably, inflicting us losses. But once we have the few golden stars, then returns might be worth it!

The quest so far

2007-12-15T11:30:00.000+01:00

So what did I do on this quest so far?
Well, a lot... and far not enough!
So far, until very recently, I was a "normal investor". Meaning a bit of real estate, a bit of stock exchange, a bit of cash in the bank. All nice and good, but :
* Real estate can prove not as rock solid as advertised - the US are a living proof of this at the moment! Well, in my little corner of Central Europe, nothing like this is happening, but I can't say I had an exceptional really return on my real estate investments. It's there, it stays there, it's relatively safe money, but won't make you rich the next day.
* For a moment, I thought the stock exchange could. And it did, in a way. I had truly amazing ROI on my stock investments the last 3 or 4 years - I had the luck to invest in emerging markets, China and Russia mainly, at the right time. BUT : the current situation is there to prove it can go both ways. My intuition is that the 30% a year I could do easily in the past is soemthing we won't see again in the next couple of years at least.

So? So... Let's recap :
- Real estate : good but not high yield
- Stocks : good but not really high yield in normal periods, and very unpredictable.
- Cash : well, you know... 3.5 a year at best...

That's how I began to think of using the stock exchange in another way : go from investing to active trading. I'm an engineer, studied too much maths for my own good, so I figured I might as well use it.
And so did I try. Learned. Read. Practiced. A lot. But that's not really the solution for me, and let me tell you why :
* I'm not especially gifted in short-term trading. On the mid to long term, there is a certain logic. What happens is usually understandable - and as such usually forseeable. But on short-term, I don't see it. That might be a gift I don't have, or lack of practice...
* Amongst other attributes needed to be a good trader, there is discipline, and total lack of emotions. Well, not really a picture of me there!
* Gift or not, it actually takes a lot of time! My current work includes a lot of time sitting in front of a PC, and that's also what trading is. Not that exciting perspectives, is it?

Well, so that's it for trading my own account... Next idea? Next idea is that I saw the power of it! And I saw what the results can be when you have smart, gifted, experienced traders doing it. It litterally gives you constant, decorrelated from any outside index results with possibly minimal drawdowns. You know what? This is what I'm searching for!

So, we say I don't wanna trade, I wanna have people trading for me to give me decorrelated, constant returns over time. Sounds like the Graal. But this is exactly what a lot of people, usually much richer than me, are searching for indeed. This is why hedge funds were created. This is what they do : produce a yield of X% a day with minimal risk on capital.
Only problem here : the X% in question is often close to 10, which is good but not enough, and the entry ticket is often very high...

Oh well, the quest was not over at this stage, was it?

Je ne veux pas travailler! I don't wanna work...

2007-12-15T11:09:00.000+01:00

Do you know Pink Martini? Not the drink, the group... They sing something like this : "Je ne veux pas travailler..." --> I don't wanna work. Very good song, and good music, by the way. Well, I'm like that. Don't get me wrong : I love my work. Sometimes. But what I don't want, really, is to have to work. I wanna do it freely, for the sake of achievement. I wanna be able to spend time with my family whenever I feel like, or do other free time activities (travel, photo - I'm an amateur photographer, films...). You see the picture?
Now, bad news : for that you gotta work. Pretty hard. Because you gotta be wealthy (and/or very smart about the way you spend your money) to achieve this.
So I got a nice job, not too badly paid. That allows me to save a bit of money each month. But if you keep it in the bank, chances are you can retire in 120 years. Well, I'm only 31, but I'd say 40-45 sounds better as the right age to be able to stop working.
Impossible you say? Probably, but let's give it a shot though!

So, in this blog, I'll be talking about my quest of trying to create a maximum of wealth in a minimum of time - using only legal means of course.

Disclaimer : please only consider this a my personal reflections on a certain number of financial products. I don't sell anything, I don't advise you to do anything, and I can tell you for sure that a lot of what you will read here implies a very high level of risk. You should decide for yourself if you want to take the risk or not.