Trend Following: These strategies aim to identify and capitalize on trends in the market, whether they are upward or downward. Algorithms analyze price movements and technical indicators to determine the direction of the trend and generate buy or sell signals.

Mean Reversion: Mean reversion strategies assume that prices will revert to their average or historical levels after deviating from them. Algorithms identify overbought or oversold conditions and execute trades to take advantage of price corrections.

Statistical Arbitrage: Statistical arbitrage strategies exploit pricing discrepancies between related instruments by using statistical models. Algorithms analyze historical price relationships, correlations, and other statistical metrics to identify mispricings and execute trades to profit from them.

Market Making: Market-making strategies involve providing liquidity to the market by continuously offering to buy and sell securities. Algorithms monitor the order book and execute trades to capture the bid-ask spread. These strategies often require sophisticated risk management techniques.

High-Frequency Trading (HFT): HFT strategies involve executing a large number of trades in fractions of a second to take advantage of small price inefficiencies. Algorithms use complex algorithms and ultra-fast execution to capitalize on short-lived market opportunities.

Event-Driven Trading: Event-driven strategies focus on trading opportunities arising from specific events such as corporate earnings releases, economic reports, mergers and acquisitions, or geopolitical developments. Algorithms monitor news feeds, data releases, and other event sources to make trading decisions.

Machine Learning and AI-Based Strategies: Hedge funds also employ machine learning and artificial intelligence techniques to develop predictive models and trading algorithms. These algorithms analyze vast amounts of data, including market data, news sentiment, and other relevant information, to generate trading signals.

It’s worth noting that these strategies are not mutually exclusive, and many hedge funds combine multiple strategies or adapt them to suit their specific investment objectives. Furthermore, algorithms used in algorithmic trading can vary widely in complexity and sophistication, ranging from simple rules-based models to advanced machine learning algorithms.

Sourced from AI, assessed by Sean Lee

The use of leverage has long been seen as a key strategy for investors seeking to increase their return on investment. However, leverage also carries with it the potential to significantly increase investment risk as well. For this reason, it is important for investors to understand the relationship between leverage and volatility when considering their investment strategies.

Leverage is the use of borrowed money to increase potential returns on an investment. By borrowing funds from a lender, an investor is generally able to purchase more securities than he or she could otherwise afford. For instance, an investor might purchase a stock with a fraction of the purchase price provided through a loan from a broker or other lender. The use of leverage can amplify potential investment gains in terms of both capital appreciation and dividends, but it may also magnify losses.

Volatility, on the other hand, is a measure of risk in an investment. It is generally expressed as the range of possible returns within a specific investment over a certain time frame. Generally, the greater the volatility of an investment, the greater the risk of potential losses, but also the potential for larger returns.

There is a direct correlation between leverage and volatility. As leverage is used to increase returns, the level of risk an investor takes increases as well. Because of this, investments with higher levels of leverage tend to be more volatile than investments with lower levels of leverage. For instance, investments with higher levels of leverage may have a wide range of returns over a period of time, with some returns meeting or exceeding expectations and others significantly below expectations.

In addition, investments with higher levels of leverage tend to be more sensitive to market changes. Because of this, investments with higher levels of leverage can have a more extreme performance when compared to investments with lower levels of leverage. This can make them more difficult to manage, as it may be necessary to adjust position sizes more frequently or take more aggressive actions in order to remain profitable.

Therefore, investors should carefully consider the potential impact of leverage on volatility when making investment decisions. Understanding the level of risk associated with different types of investments and assessing the potential impact of leverage on volatility can help investors create a more efficient portfolio and lessen the impact of market fluctuations.

In conclusion, leverage and volatility are closely related and understanding the relationship between them is essential for investors. Leverage can magnify an investment’s potential returns, but it also increases the potential risks. By considering the correlation between leverage and volatility, investors can make more informed decisions and better manage their investments.
Sourced from Chat GPT, assessed by Sean Lee

References

Bretzke, R. (2018). Leverage & Volatility: Understanding the Relationship. Investopedia. https://www.investopedia.com/articles/investing/041415/leverage-volatility-understanding-relationship.asp

Investopedia. (2020). Leverage. Investopedia. https://www.investopedia.com/terms/l/leverage.asp

Investopedia. (2020). Volatility. Investopedia. https://www.investopedia.com/terms/v/volatility.asp

Introduction
For many traders, there’s no better feeling than earning large profits on a Forex trade. Whether you’re a novice or a seasoned pro, maximizing your returns on Forex investments requires following a few key tips. While there’s no one-size-fits-all approach, here’s how I approach making smart investments on the Forex market.

Developing an Investment Strategy
The most important part of successful Forex investing is developing a careful and well-thought-out plan. Every trader should have an end goal in mind when getting started and this should be tailored to suit their individual goals. Some traders focus on having short-term investments with quick returns, while others prefer to play a long game and look for investments with bigger returns over a longer period of time.

It’s also important to research and be aware of any potential risks. As with any investment opportunity, there’s always the chance of losses due to unforeseen market fluctuations and other uncontrollable factors. Having a plan for risk management is a must.

Research & Analysis
Before investing in anything, it’s important to do thorough research and be conscious of the current market trends. Keeping a close eye on daily news and trading patterns can be a great way to gain an understanding of the Forex market. Regularly checking in on currency values and keeping a close eye on industry news can help traders make informed decisions on when to buy and when to sell certain currency pairs.

Technical Analysis
Technical analysis involves the use of charts and indicators to analyze historical performance and predict future movements of exchange rates. Using these tools can provide traders with better insight into the overall direction of the market. Many platforms offer real-time technical analysis tools that traders can use to gain an edge on their trades.

Leverage
The use of leverage is a popular strategy employed by many Forex traders. Leverage allows traders to borrow money from Forex brokers to multiply their capital and increase their returns. It’s important to remember that while leveraging can be a great way to increase potential profits, it’s also a risky strategy that can lead to large losses if not used responsibly.

Conclusion
Investing in the Forex market can be a great way to make money, but it requires extra precaution and careful planning. Developing a thoughtful investment strategy, doing thorough research and analysis, and being conscious of technical analysis and leverage are all key tips to consider when investing in Forex. Following these tips can help traders maximize their returns and minimize potential risks.

Sourced from Chat GPT, assessed by Sean Lee

• Our funding program for traders with <$5m under management is about to launch. This has been a huge bugbear for us as institutional investors will simply not look at anyone with an AUM of <$5m. We have devised our own program with guaranteed allocations starting at $50k and rising to $3m pretty quickly. The program is receiving excellent feedback from institutional allocators so hopefully this will be the missing link in our career chain. (Contact me directly for more information).
• One-on-one mentoring is still available to managers with a minimum 2-year track record.
• For those who haven’t already done so, adding crypto-market knowledge and trading experience will greatly benefit your asset management business. Time to educate yourself!
• On the jobs front, there is still a very heavy bias towards quants and there isn’t much happening for discretionary traders right now.

Now he needs a bit of a leg up, so if plenty of us can give a little, then I’m sure that will help him a lot. I’m a bit late to the party, having been under a rock for the last few months, but better late than never.

Here’s the link: https://www.gofundme.com/f/zgamw-help-gerry-get-back-on-his-feet

There are some very exciting initiatives on the way, especially for aspiring crypto traders, so please register for our newsletter and stay abreast of all developments.

• Particularly for the newer members, please ensure that your strategy description and personal bio are up-to-date on the FXWW Select portal.
• There will be monthly webcasts going forward, focusing on developments in the alternative investment space. All members are automatically invited. There will be guest speakers primarily from the allocation side.
• Non members, both investors and managers, must register to attend these webcasts. This can be done either directly through me or via support@fxww.com.
• As always, feel free to reach out directly to me with any questions or requests.

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Q7. What size of personal account is considered ‘relevant’? Like everything else, it depends. I would suggest that $5-10k minimum account sizes with usual leverage usage of 5:1-10:1 and occasional managed increases to 30:1-50:1 is acceptable if the risk is managed. Investors want traders who can take controlled market bets but can dial it back when required.

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Q8. How much will I be paid when I get my first allocation? Early-stage traders will not receive a management fee and can expect terms like 0&25, so 0% management fee and 25% of fresh profits, on either a monthly or quarterly basis. Established traders can charge a hedge fund like fee structure, with 2&20 being the usual model.

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Q9. How does FXWW get paid? We act as an agent or a 3rd party marketer if you like. We earn a standard 20% of all fees we generate.

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Q10. Do I need a license? Anything which will add to your credibility is a distinct advantage. Licensing or further relevant education always helps. If you are unlicensed, as most start-up traders are, we will organise suitable regulatory cover.

I thought it might save a bit of time if I answered some of the more frequently asked questions here, but by all means feel free to contact us directly with any individual questions you may have.

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Q1. “What are my chances of being added to the FXWW Select platform?”. If you can show a consistently profitable performance record, using a consistent strategy, and you have no skeletons hidden in your trading closet, then I would say the chances are pretty good.

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Q2. “What does a ‘good’ performance record look like?”. For a riskier type of prop trader, the ability to make annual profits of 30-60% using moderate leverage. For a more conservative money manager type, the ability to manage their drawdown profile and deliver solid returns (5-15%) on low leverage .

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Q3. “Who are the typical investors and how much will they invest?”. The allocations start from $100k and to be perfectly serious, the upside is only limited by the trader’s strategy and their nerve! The investor profiles range from hedge funds through to high net worth investors, from fund-of-funds through financial adviser groups.

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Q4. “Why do I have to pay an annual registration fee of $100?” To try and eliminate as many time wasters as we can!

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Q5. “Is a demo track record acceptable?” NO

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Q6. “How long can it take to be added to the FXWW Select platform?”. If you are an ex-institutional trader with a verifiable track record and strong references, you will be added immediately. If you are a self-funded trader with an impressive performance record, in the region of 3 months. If you are a self-funded trader with a limited performance history, you can presume that it will take at least 6-12 months (but don’t be discouraged, everyone needs to start somewhere and sometime).

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Good luck to all.

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We will only accept candidates who we believe have the attributes to make the transition from self-funded trader to risk-manager in the funds management industry. These attributes include;

• managing an explainable core strategy and implementing it consistently
• having a USP (unique selling proposition)
• having the adaptability to move from self-funded trader with a ‘profit’ goal to a manager with a ‘risk-management’ mandate

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1. The basic industry rule of thumb is that you will need a minimum 2-year audited track record. As an FXWW member, your previous track record will be taken into account and will be validated by your on-going performance.
2. Typically the industry will expect that you have some institutional trading experience or at the very least, some strong industry references. FXWW has earned the industry’s trust and as a member you benefit from this relationship. We can vouch for our members credibility.
3. The standard industry remuneration is known as 2&20, or 2% management fee and 20% of profits. Those starting out in the funds management industry need to be realistic about the management fee that they can charge and starting out with a 0.5%-1.0% management fee might be appropriate in many cases.
4. Assets under Management (AUM) is the name of the game. The first target for every manager is $10 million after which you should be trading full-time. The main target is $100 million, after which the raising-of-capital becomes significantly easier.
5. Quants are Kings! Those managers with systematic processes will have a significant edge over the purely discretionary trader when it comes to raising funds from the really big investors. Like it or not, it’s simply a fact of life.

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Membership is not cheap. This is only for those who are really serious about their trading careers.

Rather than putting your money at risk with retail brokers and suffering the inevitable high fees and spiked stop-outs, you can now trade our account with an institutional broker safe in the knowledge that we will do whatever we can to ensure that you make as much money as possible. You will be paid a fair percentage-of-profit compensation and you will earn management fees once your competency has been proven.

Members that reach the prescribed proficiency will receive increased allocations which are calculated using the profiling and performance algorithm.

The top performers will be added to the FXWW Select platform where they can attract institutional and wholesale investors.

There are a number of levels of membership with each attracting a partially refundable deposit and an annual retention fee.

FXWW services include news & data services, institutional research, data analytics, regulatory cover, and marketing material.

An additional advantage for traders is that they can anonymously build a funds management profile whilst still managing their current careers.

REGISTER HERE for free access.

As with most things, the ‘easy’ option also involves a lot of hard work and attention but at least you will get an invaluable insight into what some professional traders look for in the market.

The obvious benefit of trading our account is that you can create an anonymous profile which is nonetheless verifiable and audit-able and can be used to attract investment funds once you decide to leave the institutional space.

Other benefits include comprehensive data analytics, bespoke marketing material, and CapIntro services.

For more information, contact us directly and in complete confidence via the FXWW support page or alternatively fill in the Premier Trader Form and we will get in touch.

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Qualifying traders have been filtered according to profitability, consistency, correlation, and capacity.

Qualifying managers have been filtered on their ability to consistently deliver their mandate.

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Professional investors can build their own products using a mix of any available traders or managers.

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Allocations can occur via give-up agreements, managed accounts, or bespoke contractual arrangements.

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Contact us for more information on ‘professional-investor-qualifications’ and we can then provide you with more qualitative and quantitative analysis on individual traders and managers

You will need to have significant experience as a trader or analyst and be able to write interesting and technically proficient reports.

I would describe this role as mid-level and could suit someone who is early in their career-path or someone slowing down after a pressurised institutional career.

Contact me directly via the website or via Linked-in if you are interested in finding out more details.

We live in different times now but the risks are still the same. The present day market is dominated by huge ‘Algos’, systematic models which thrive in range-bound markets where the models can pick up the spread. Even if the spread is very tight, if you are picking it up thousands of times a day in significant volumes, you are certain to make a lot of money.

Old timers will remember the markets of the 1980’s and 1990’s when the bigger players could bully the market (most of the time); they could soak up whatever was being thrown at it and then simply move the market because they were big enough to do so. But these were only ever sort-term movements as no one player had the credit lines and depth of pockets to maintain dominance for any length of time.

Now we have a situation where the Algos are so huge that they can in essence do exactly what the bully boys did 30 years ago. They can tie the market into a tight range, warehousing the huge underlying positions which are being generated, and keep generating spread revenue session after session.

But, (there’s always a but) there is a problem. All the Algos are programmed the same way and do the same thing. Banks and hedge funds simply turn on the Black Box and let the profits flow in. Remember how this ended for LTCM! The main impact in the case of LTCM was in USD/JPY which fell something like 15 big figures in an afternoon! Now extrapolate this scenario to where you have multiple LTCM-lookalikes all doing the same thing in bigger size and in less liquid currency pairs. How do you think this is going to end??

I don’t know when it will happen but I do know that it will. Take it away Shirley, it’s all just a little bit of history repeating.

If you want to have a career as an independent prop trader in the FX space then you need to focus on what the investor wants.

Let’s start with credibility and trust. If the investor finds something in your past that you are hiding (eg a blown-up account or 3!) then they are unlikely to make even a small allocation. Be honest, declare everything. It’s not expected that self-funded self-taught traders will have a blemish free track record! The investor wants to see that if you have made mistakes, they were made on your money!

Settle on a consistent trading strategy and risk management plan. NEVER deviate. The investor must know what to expect in all market conditions (notwithstanding the 5-year black swan events). Investors will pull your funding if you deviate from the plan, even if you are profitable.

Finally, I have yet to come across a serious institutional investor who is chasing 100% returns. They may allocate a small percentage as part of a portfolio to riskier traders, but if you really want to build some serious AUM then do so on the basis of a conservative approach; managed drawdowns and achievable monthly targets.

We know what the investors want, so what is the perfect profile? A 2-year track record, systematic approach to risk management, partially systematic approach to trading, moderately active strategy giving plenty of data to analyse, consistent monthly returns of 0.8-1.2%, and peak-to-trough drawdown of < 2.5%.

If you have this record you should be hanging out your shingle as a professional FX trader.

My main reasoning is the latest IMM data and general information from the hedge fund space, namely that the world and it’s mother is short Kiwi. The great risk-off event hasn’t materialised and we may now start to see an unwind as we head towards Christmas. Not sure about timing and as we well know, the algos can keep us tied in tight ranges for indefinite periods but I am small long and looking for opportunities to add to both positions if momentum starts to build.

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All members of the FXWW Select platform must pass the wholesale test.

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The trader application process happens in two stages; quantitative and qualitative.

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We are currently taking applications from Australian-based traders who fulfil the criteria and wish to join the FXWW Select platform. Traders from other jurisdictions will be contacted separately regarding their applications.
If you think you have what it takes to attract discerning investors, then please take the following steps:

– Firstly, fill out the Premier Trader Application form.
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– Once this has been done, you will receive instructions from us on how to sync with the FXWW EA which will allow us to analyse your trading data.
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– Qualifying traders will be invited to take part in the interview process.
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– Selected traders will join the FXWW Select platform where they will be eligible to earn both management and performance fees on investable funds.
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Monex Securities
Monex Securities has been chosen as the preferred destination for FXWW Select in Australia. Part of the Monex Securities Group, Japan’s biggest online broker, the Group has 14 offices globally, $46 billion in assets and 3.7 million investors.

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Further information is available after registration or you can send queries and questions via the Contact Us section of the form provided.

The information in this email is prepared without considering your objectives, financial situation or needs. Monex Securities Australia Pty Ltd (ABN 84 142 210 179) is the financial product issuer who solicits business in Australia only, and regulated by the Australian Securities and Investments Commission AFSL (363972).
Trading margin FX and CFDs carries a high level of risk. You do not own, or have any rights to the underlying assets. Trading is not suitable for everyone and may result in you losing substantially more than your initial deposit. Prior to you make an investment decision, please ensure you carefully read the Product Disclosure Statement (PDS), Financial Services Guide (FSG) and Margin trading Terms and Conditions which can be obtained from Monex website https://fx.monexsecurities.com.au , and fully understand the risks involved before deciding acquired any of the financial products they provide.