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Nov 22, 2018 4:01:16 PM

Benefits of Using Managed Forex Account Services

Over the last few years, more and more people are seeking out higher returns than the standard bank interest. As a result, more and more investors are seeking a managed forex account service to help them generate additional cashflow.

In this article, we are going to looking at the benefits of using a managed forex account service and how it can potentially help you achieve your financial goals with less stress.

When it comes to trading the global Forex markets, there are two main ways to trade..

  1. Self-directed trading; and
  2. Managed forex account services.

Both come with their challenges, but first, we’ll look at self-directed trading.

When you trade your account, you must have your psychology spot on, as there are a lot of emotions involved.

Many traders tackling the Forex markets for the first time set high expectations. Instead of ‘learning the ropes’ they go in with hopes of generating unrealistically high returns.

Unfortunately, generating a high return during your first few years of trading is often more luck than skill.

Inevitably, you suffer a series of losses in a row, andyour account goes in a drawdown.

Your confidence is now at an all-time low and, as Murphy’s law would indicate, the minute you stop trading, your system’s best trades come up, without you on them.

Fear then sets in, you procrastinate, and you fail to take every trade your system generates.

Now you are in a worse position than when you started. Your account is down, your confidence is low, and you still don’t have an effective trading system.

A managed forex account service, on the other hand, simplifies everything for you.

There are many benefits associated with a managed forex account service, and we’re going to cover them here.

Why do people choose to trade their accounts?

One of the reasons people trade their accounts is they are curious to see how their trading ideas will perform.

Many traders believe they can outperform the professionals who have dedicated their life to their pursuit. Some mistakenly believe they can transfer their current work or life success across to the Forex markets without putting in the years of study and lessons learned.

The second reason people like to trade their account is they see some people turning a small amount of money, maybe $10,000 into a much larger amount of money in a very short space of time.

Now, anyone interested in making money is going to be quite captivated by the large returns some people quote.

 

The third reason people trade their account is they are motivated to generate an additional stream of income.

Trading for income makes a lot of sense as most first world countries are quite expensive to live. To try the nice things in life, additional income streams are needed.

The forex markets appeal to those who wish to generate money on the side because it can be traded 24 hours a day, five days a week. The Forex markets are very liquid, which means you can get your money in and out with ease.

What is the main goal of a trader?

The number one goal of any trader is to earn a positive return on the money invested.

While this sounds easy on paper, it is much harder in real life.

Many so-called successful traders make it sound as easy as buying a few currency pairs, hitting sell and banking all your profits.

They neglect to mention the seven or more years or blood, sweat and tears that went into carving their Forex trading career. The countless late nights, dozens of trading books and failed trading ideas.

At the end of the day, your goal should be to generate a positive return. Don’t get this confused with having to do it yourself.

Therefore, you must seriously consider a managed forex account service as part of your financial strategy.

For example, instead of having to:

  • stay up late at night;
  • analyse all the currency pairs;
  • listen to the key economic reports;
  • chat with other traders on online forums;
  • pour over dozens of charts across multiple timeframes;
  • adjust your risk management parameters daily; and
  • adjust your spreadsheets,

you can have a professional trading your account for you daily.

You still have the goal of getting a positive return in the market, except you don’t have to spend the time, money and energy associated with generating those returns.

If the main goal for you is to generate a positive return, then you need to consider a managed forex account service.

Why is it important to keep the end goal clear in mind?

It is essential to keep the end goal of what you are looking to achieve front and foremost in your mind. You must constantly be thinking about how to generate a positive return from your funds under management.

In fact, for many people heading into retirement, earning a positive cash flow is such a beneficial thing it can truly change the way you live and the lifestyle you have.

Taking the time to consider a managed forex account service may be the exact thing that you are looking for.

The reason being is you do need to generate a positive return on your money, but you don’t need to spend the time, effort and money and resources to do it yourself.

If you get a buzz out of staying up late at night watching the forex markets, then set up two accounts. The first account is your base. You set the money for the first account with your managed forex account service.

The second account is your trading account. Set your goal to see if you can outperform your Forex account, manager.

What are the top three benefits of a managed forex account?

  1. Time

The first major benefit of a forex managed account service is time.

Time is our most precious resource.

Don’t just think about the time of actively trading. Actively trading is often the fun part of executing the trade and following your stops.

What people fail to realise is it can take at least 6 to 12 months of developing a sound, low-risk trading idea. Then you must backtest your new strategy. This will then give you the confidence to trade the idea and your new setups.

If you are only thinking about the time it takes between 7pm and 10pm to execute your system; then you are mistaken.

Think about the time it takes to proactively build and manage and backtest a fully developed trading system. A professional trading system includes your entry, exit and risk management parameters.

  1. Working with a professional

The second benefit of working with a managed forex account is you get to work with a professional. Ideally, the managed forex account you select will be run by a professional who has been in the markets for years.

It’s their life.

They live and breathe the forex markets.

You get to work with a professional who has been building their trading systems, building their trading ideas and back testing their ideas in the market to make sure they’ve got a positive expectancy in their trading system.

  1. You control your funds

The third benefit of a managed forex account is you control your deposit amount and can start and stop when you like.

Not everyone understands this.

When you open a managed forex account service, you control the amount of money you put in.

Sure, they may have a minimum account opening balance, but at the end of the day, you can control your initial deposit above their set minimum.

Here are some points to consider about your account:

  • Your Forex account is 100% in your name.
  • You control your account 100% of the time.
  • The managed forex account service only has authority to place trades on behalf of your account.
  • They can never withdraw cash from your account.
  • They cannot transfer funds from your account.

Remember, you control when you start and stop trading the managed forex service. You need to keep this in mind as well.

If you want to stop your forex managed account service, you need to discuss it with your forex account manager.

However, you can ask them to close all positions on your account, and they will close them within the hour.

How do I get started with a managed forex account service?

Getting started with a managed forex account service is simple.

Your manager will have an affiliated Forex broker, and your first step is to open an account with them.

Filling out the online forms only takes a couple of minutes.

You submit your forms, and once your account is approved, you will then be able to fund your account.

The entire account opening process will not take more than 24 hours.

You then approve the firm to manage trades on your behalf. Once complete, the next trades meeting their strict criteria will be executed into your account.

As you can see, there are several benefits of a managed forex account service. It is easy to set up. It will save you time. It will remove the emotions from your trading. You get to work with a professional, and you control all deposits and withdrawals to and from your account.


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Forex | 5 MIN READ

slow-churning-markets

Nov 22, 2017 8:27:00 PM

How to Tell if Your Investment Manager is Churning Your Trading Account

Your goal as an investor is to preserve and grow your wealth. At the end of every month, you want your equity to be higher than what it was at the start of the month. In this post, we’ll be discussing how some investment manager’s and managed account services could potentially churn your account for extra income, and what you need to be aware of.

What exactly is churning an account?

Let’s consider two investors who both have $50,000 with their preferred investment manager.

The first investment manager implements a dedicated trading strategy based on a fully backtested trading system. This system has historically generated a positive return over time and in recent results, has enjoyed a 5% gross return per month for the last three months.

The second investment manager is more interested in earning commissions from the brokerage. The strategy he employs is very much influenced by strongly uptrending markets. When the markets are rising, his results are good, but when markets take a turn, his performance suffers greatly. The good news is his strategy has produced gross returns of 5% per month over the last three months. The same as the first investment manager.

Now let’s consider the trading activity levels on the account.

An example of churn on a trading account

You are no doubt aware there is a cost associated with every single trade. No matter if it is a stock, index, commodity or Forex trade, there will be a cost to transact each time. Whether it be commissions or spreads, there will be a cost.

Investment manager 1 trades ten times per month or around one trade every second day. To keep things simple, let’s say brokerage is $50 per trade.

Ten trades at $50 per month is $500 per month. $500 per month is the equivalent of 1% on a $50,000 account.

Investment manager 2 trades at 50 times per month or slightly more than twice a day. But what you might not realise is how much of that commission goes back to the investment manager.

Let’s take a closer look at the figures after three months of hypothetical trading results.

Fund 1 – 10 trades per month   Fund 1 – 50 trades per month
Starting equity 50000   Starting equity 50000
Trades 10   Trades 50
Cost per Brokerage 50   Cost per Brokerage 50
Total Monthly Brokerage 500   Total Monthly Brokerage 2500
3-month return 15%   3-month return 15%
Gross equity 57500   Gross equity 57500
Total brokerage (3 months) 1500   Total brokerage (3 months) 7500
Equity after 3 months 56000   Equity after 3 months 50000
Net profit 6000   Net profit 0

 

As you can see, both accounts achieve a 15% hypothetical return after three months. But one achieved those results with five times more trading activity.

You will notice the significant impact a high number of trades has on an account. We can refer to this as churn.

Churning is when an investment manager executes a high number of trades to generate commissions. As a practice, Churning means the investment manager is not acting in the clients’ best interest. Churning is not only unethical, but it is also an illegal practice.

Now you will understand why the term ‘churn’ has such a negative connotation to it. Unfortunately, it is negative for the person outlaying the capital but positive for the investment manager. They will be earning a substantial portion of that as their monthly commissions.

Forex turnover versus stock turnover

The example above is more indicative of a stock portfolio, given the $50 brokerage fee per trade.

When it comes to trading Forex, there are no commissions. Instead, they have what is known as the spread.

The spread is the difference between the first buyer and the first seller.

If we consider the Aussie Dollar, the current price is 0.7657. For this example, we will go to the fourth decimal place, which is known as a pip. The fifth decimal place is 1/10 of a pip. Traders always talk in terms of pips when it comes to trading forex.

 

trading forex

Source: Metastock

The first buyer will be sitting at 0.7657, and the first seller will be at 0.7658. In this example, we will assume a 1pip spread as standard on the Aussie Dollar.

When we trade one full contract (the equivalent of $100,000), we pay the spread on that value. At $100,000 position size, each trade will have a spread value of $10.

The beauty of trading Forex is the flexibility of trade size. You are not restricted to trading a position size of $100,000. You can trade mini contracts.

One mini is $10,000 in trade size. The spread on that will be one pip or $1. Each mini contract is 1/10th the effective commission.

Getting back to the example of trading stocks, you recall the significance of a high volume of trading activity of the bottom line profits.

Similarly, when it comes to Forex trading, a high volume of trading activity incurs a higher cost base.

Spread markup on every Forex trade

When it comes to reading the fine print, you will notice something call spread markup. This is one way how many managed account services earn an income from managing your accounts.

If you consider the 10+ years of focused effort, study and trial and error that has gone into building a robust trading system, you begin to appreciate that this is a fair fee for managing so much money.

What is a spread markup?

A spread markup is when an investment manager will add their spread on top of the current spread. For example, an investment manager may add a one pip spread on top of the current spread.

Unfortunately, many Forex managed account services try and hide their spread markup fee.

At Walker Capital Australia, we are a big believer in transparency. As a result, our Financial Services Guide (FSG) always has an accurate figure of exactly what our charges are for each strategy mentioned below.

You can always reach out to one of our team to discuss how the spread markup works on your account.

Should I be concerned about the spread markup?

As mentioned above, the time and devotion that goes into building a fully backtested and scalable trading strategy is not easy. There is a lot of skill and patience involved. You then need the mindset to allow you to execute the strategies without mistakes in the market.

As you can appreciate, any investment manager who is responsible for your gains needs to be fairly compensated.

The only time you should be concerned about the spread markup is when you cannot easily find it. Or perhaps when you ask the investment manager, they avoid the subject or cannot give you clear answers to the simple question.

Trading activity of various Forex strategies

Now you understand what churn is and how trading activity affects your bottom line profits. Let’s jump into the different types of trading strategies and the activity levels each has on your account.

By understanding different trading styles, you will be able to understand which ones may be setup to churn your account versus those which are there to minimise your investment costs.

Day trading

This is often a big red flag. Active day traders can do as many as 300 trades per day. That is not a typo. 100-300 trades per day is the level of activity day traders can hit. Your costs here are very high. At Walker Capital, we do not believe a day trading strategy is beneficial for long-term gains, so we do not employ such a high turnover style.

Swing trading

Swing trading looks for uptrending or downtrending markets which have recently pulled back from their recent run. At this pullback level, it is probable the market will consolidate and then move higher again.

Retracement strategy

The retracement strategy can be a little more active as it benefits from range-bound markets. Markets don’t always trend, so it is important to have a method which benefits from sideways trending markets.

Breakout strategy

Breakouts are the explosive moves which occur infrequently but allow the opportunity for big moves. Identifying trades in this area can be a little harder and so this strategy trades less frequently.

Price Action strategy

Price action trading is identifying specific patterns within the price of the underlying asset without the use of indicators. Price action traders will look at certain candlestick or bar chart patterns, support, resistance and the overall trend of a market.

At Walker Capital, we believe it is important to be as transparent as possible with every account we manage.

Which is why we explain trading styles and set expectations around each one.

To find out more about the Walker Capital investment strategies get in touch today.

Here are the steps to get started:

  1. Schedule an appointment (Conference Call) with an Investment Manager
  2. Submit a Managed Discretionary Account (MDA) application with Walker Capital Australia.
  3. Open a trading account with the Walker Capital Australia’s executing broker.
  4. Select from our range of investment strategies and choose your asset allocation between the choices of accounts.
  5. Once all accounts are opened, and funds have been chosen, our team gets to work and begins trading.

We welcome you to give our team a call to discuss your investment goals and objectives.

You can call Walker Capital Australia on +61 2 8076 2210, and we’ll see how we can help you achieve your investment goals.


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Performance Fee's | 5 MIN READ

questions

Oct 31, 2017 8:22:00 PM

8 Questions to Ask Before You Pick Your Managed Forex Account Provider

Who you trust with your investment is a critical factor if you want to have a healthy nest egg, particularly in your retirement years.

If you’re like many investors who are still busy with full-time work and don’t have the time and expertise to grow your investment, it may be wise to seek help from investment pros.

This is because when you have investment pros managing your money/capital, you can have that peace of mind and assurance that someone is looking after your investment almost 24/7.

Compared to your limited time – realistically, how many hours have you spent the past 3 months analysing your investment portfolio? Investment managers spend most of their time analysing the markets, evaluating investment opportunities and managing the overall growth and risks of the funds they’re managing.

Tap into investment pros’ market expertise

Another advantage of using investment managers is that you’re tapping into their expertise and knowledge of the markets.

Investment managers and almost everyone in the financial services industry are required to go through an ongoing education and training. This makes sense because they need to make sure they are up-to-date with market regulations, product knowledge and the overall market movements.

Given all those benefits, it may be a good idea to include the use of investment managers or managed funds (forex, shares or other assets) as part of your investment strategy. Even if you only use them for a portion of your investment capital, it may help in diversifying your portfolio or boost its return as well.

But before you ask your friends or relatives for any recommendation on who the best investment manager to use, you need to do your own homework as well.

And it doesn’t matter whether you have a short-term, medium-term or long-term horizon for your investment, the important thing is to have a strategy to grow your capital.

Whether you want to fast-track your wealth creation or boost your retirement fund to a healthy level, there are logical and strategic ways you can use to make informed decisions when investing and growing your money.

In this article, we will dig deep into the top 8 questions you need to ask before you choose your investment manager. In particular, we will be looking at Managed Forex Account managers who use the global forex market as the main investment vehicle.

Using managed forex accounts to fast-track your investment growth

Managed forex accounts are fast gaining popularity among investors including SMSFs due to the potentially high returns they offer. With the potential slow growth phase of the Australian property market and some other asset classes, investors are now looking for better alternatives. And they are more open to considering other asset classes including forex.

Whether you’re a self-directed private investor or one who is managing and growing your SMSF account, it is wise to consider a few different ways of investing. The good thing with using managed forex accounts is that you still have total control of the account while it is being traded and managed by a professional trader or the investment manager.

Here are the top 8 questions you should ask before you choose your Managed Forex Account Manager.

  1. Are you (the managed forex service provider) regulated?

Australia has one of the most stringent and robust regulatory environments in the world when it comes to financial services providers.

For investors, this can be reassuring as you would like to be dealing with people and companies that are properly regulated and have the appropriate licenses.

As part of your research and due diligence when you’re considering a managed forex account service provider, one of the most basic (and must) questions to ask is are you regulated? This is important because you want to be dealing with an appropriately licensed provider.

Nowadays, it is quite easy to check whether a company is regulated by ASIC or not. Financial services providers are required by law to prominently declare their license details on their website and all relevant information materials like this one.

  1. Who holds my money?

This is another critical question to ask because even if you choose to set up a managed forex account, you want to keep control of your money.

You have to make sure that the account is in your name (your spouse or partner) or your SMSF account.

At the same time, you want to make sure that the money is in a safe account with a trusted Australian bank or financial institution. And it goes without saying that you want full control of the trading account as it is your money, in the first place.

  1. How much funds are under management (FUM) do you have in this strategy?

The size of the fund under management can be an indication of the positive performance of the manager and their strategy. It can also be a measure of the level of trust other investors have for that particular manager.

If you look closely, here are some of the things that the FUM can tell you about a managed account service provider:

  • A big FUM can mean the managed account manager is able to grow the accounts
  • This could be a positive reflection of the trading/investment strategy being used
  • A big FUM can also mean more people trust this managed account provider with their money
  • A gradually increasing FUM can show the consistent and steady investment strategy at work 
  1. Who is the trader/manager and can I talk to him/her?

Again, this is a vital factor to consider. You want to know that your investment is being looked after by someone who has the market knowledge, expertise and experience.

Though you will most likely be dealing with a salesperson during the initial stage of your research for a managed forex account provider, it is important that you ask to meet and talk to the actual manager or trader.

And you should use this meeting with the manager/trader to ask all the questions you need to ask. It is also a good opportunity to use this meeting to validate or confirm your decisions. Whether you go for a particular managed forex account provider or not sometimes boil down to your relationship with the actual manager/trader.

The investment manager/trader is also the best person to talk to you about the strategy and the nitty-gritty of managing your investment.

Remember, it’s your money that you’re trying to grow, so it is better to spend the time doing your due diligence and meeting with the investment manager/trader directly.

Here are some of the things you want to consider when looking for a managed forex account provider:

  • Someone who has the track record
  • Someone who has the strategy/ies for different market conditions
  • Someone with solid systems and processes in place – investment criteria, risk management and money management procedures
  1. What’s the difference between net of fees and gross results

Another basic question that you need to ask your managed forex account provider is the fee. How much will they charge you? And what’s the basis for the fee? Is there a high water-mark where you only pay them a fee if they have a positive return on your investment?

It is important that you know or at least to have some estimate of how much return on your investment you will get. And if your total returns will be affected by how much fees you have to pay.

  1. Do you publish the history of the trader’s results?

It is also important to see previous (historical) as well as current performance figures from the managed forex account provider.

Though they will always say that previous performance is not a guarantee of future results, it is good to see how they have performed in different market conditions. At the same time, you would like to see their current performance so that you can compare them with what the markets are doing.

Current performance is vital because it can give you their actual performance in today’s (current) market condition.

  1. Has the trader managed funds before?  

Similar to interviewing someone for a job, you want to have a managed forex account manager/trader who has a good track record. Someone who has managed similar funds before and who have solid performance to show for it.

Again, while previous performance may not always guarantee you the same results for the future, you still want to have someone who has the knowledge of the markets and the skills to implement the trading/investment strategy.

Ideally, you want someone with several years of trading experience who has seen the ups and down cycle of the markets. This is because you want someone who can handle the pressure and can make logical and strategic decisions when market conditions are tough.

You want someone who can stick to the investment strategy and manage the risk.

  1. Transparency and how do you access your account?

While some managed investments, particularly funds, only give you annual reports, what you want is total transparency and accessibility. This means that you can see the actual performance of your forex managed account on a regular basis.

While you may not want to look at it on a daily basis, you need a level of transparency that will give you that access and ability to monitor the performance if you want to.

Transparency also means you can deposit or withdraw money from your account if you need to.

For example, if there are emerging opportunities that you want to take advantage of, you may want to add to your portfolio by depositing additional capital.

The same is true with withdrawals, if for some reason you need to take out some money from your forex managed account, you should be able to do so because you have complete access to it.

These are just 8 of the important questions you need to ask before you choose your forex managed account provider.

If you want to know more about how you can take advantage of managed forex accounts,

Here are the steps to get started:

  1. Schedule an appointment (Conference Call) with an Investment Manager
  2. Submit a Managed Discretionary Account (MDA) application with Walker Capital Australia.
  3. Open a trading account with the Walker Capital Australia’s executing broker.
  4. Select from our range of investment strategies and choose your asset allocation between the choices of accounts.
  5. Once all accounts are opened and funds have been chosen, our team gets to work and begins trading.

We welcome you to give our team a call to discuss your investment goals and objectives.

You can call Walker Capital Australia on +61 2 8076 2210 and we’ll see how we can help you achieve your investment goals.

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Audit | 5 MIN READ

forex

Oct 18, 2017 8:20:00 PM

Forex Managed Account Services | Understanding Real Versus Hypothetical Result

Steady returns, low drawdowns and full transparency are three key factors that set the best-managed forex accounts apart relative to their competitors.

Nothing is more exciting than projecting your portfolio returns based on the historical results you see published from various Forex trading systems.

But along with the higher returns of Forex managed account services, you also have some new concepts to take into account to identify how real the returns are.

Same contributions, same age, but different retirement outcomes

For example, you will often see the TV commercials promoting industry super funds. You will see two people in identical circumstances.

Same income, same contributions and the same percentage return over 25 years or so.

But the result is always different.

The difference usually comes down to the performance or management fees of the fund.

The company promoting their fund is highlighting their lower management fees and how more of the returns go back in your pocket.

In this article, we’ll be discussing the key factors you need to consider when reviewing an investment product or service, their performance and identifying the backtested versus real returns.

The goal is to show which statistics are critical for you when evaluating a Forex managed service.

Demo account results versus real live trading

If you have been around trading for any length of time, you will know how different paper trading is compared to live trading.

Paper trading, or demo trading, is where you put your trading system to the test with virtual money to see how it performs in real time.

Paper trading is highly recommended for those who are new to trading and need to get familiar with the trading platform and how to execute their trades into the market.

Being able to test your execution and strategies in a simulated environment is an ideal way to get comfortable with your system and feel confident in your ability to execute your trades in the market.

Mistakes often cost traders a lot of money and a demo environment is the perfect way to see what mistakes you may make with zero real-life financial costs.

But those who have been around trading know the biggest pitfall of trading in a demo environment.

The biggest pitfall is the fact you have zero emotions connected to your open positions.

Your system may have generated seven losses in a row, but in a demo environment, taking the next trade is always simple.

But in real life, doubts creep in. You start to question your trading system. You start to question your entries. You start to wonder if your system is going to continue the losing streak.

As a result, in real-life, it is not uncommon for a trader to stop trading their system after a series of losses.

Murphy’s law would then jump in and the best winning trade of the year will pass you by while you are sitting on the sidelines, licking your wounds.

Argh. How frustrating.

Forex managed account – Hypothetical results versus actual results

So too with reviewing a Forex managed account service.

You need to know the company has real trading results under their belt on real client accounts versus hypothetical results.

Before we get into the important figures you need to consider, let’s take a look at discretionary trading versus mechanical system trading.

Discretionary versus mechanical system trading

There are two main types of trading systems a Forex managed account service uses, which are discretionary or mechanical systems.

Discretionary trading systems are where the investment manager will base their decisions on a series of rules over time and will have them all written down.

The discretionary investment manager can show the entry, exit and position sizing rules of their system and get others to trade it for them.

However, from time to time, the discretionary investment manager will override their rules and make changes based on new information they have at the time.

For example, leading up to the US presidential election, a discretionary investment manager may say, ‘We are going to stop trading two weeks leading up to the result and then resume trading once the dust has settled.’

As you can appreciate, the investment manager is using discretion to override their system, even though their trading rules may have provided several entry signals during that time.

A trading fund using a mechanical system also has a set of rules, but their rules are very black and white. The signal either happened, or it didn’t.

Regarding a major event, something like an election or upcoming non-farm payroll data has already been taken into account. As a result, all signals have to be executed when they occur.

A mechanical system trading investment manager knows the importance of hitting every signal as they never know when the system’s best trade is going to happen.

Backtesting discretionary and mechanical trading systems

Now you have an understanding of the types of systems a Managed Forex service will use, we can start to delve into how their results are portrayed.

Firstly, what is backtesting?

Backtesting is the process of seeing how your trading systems would have performed based on historical data.

It is important to know if the managed forex service you are considering has backtested their system and proven the success of their system.

Mechanical system traders have an edge here as their results can be coded into software like Metatrader 4 or other backtesting software and tested in seconds.

The challenge is for the discretionary trading investment manager.

As mentioned above, a discretionary trading investment manager has rules but can override them based on their experience and upcoming market events.

This means their historical backtesting will have biases. For example, seven years ago, an important market event may have happened, and they may have stopped trading. But the backtesting results cannot make those discretionary calls. Instead, the computer backtesting model will execute all trades and spit out the results accordingly.

Real trades versus hypothetical backtesting

This is where the rubber hits the road. You want to be able to see two things when it comes to reviewing the competency of your forex managed account service.

The first one is that they have been able to prove their system works on historical data. This is where you would ask for their backtested results.

But more importantly, you want to confirm they have tested their systems live in the market with real money.

Ideally, you want to be able to see a 9-12-month track record of live trades using client funds.

Nothing will beat the pressure of having to perform for client’s month after month with real money.

You must make sure you are placing funds with a managed forex service who has real returns under their belt.

Walker Capital live trading results

Our team have been investing in the Forex markets for nearly ten years and have tested hundreds of individual trading systems.

As a result, we take an individual approach with our clients and walk them through both our backtested historical results and our live results.

You will notice on our website when you review the performance of our funds, we show you the:

  • Equity curve from when we started trading client funds
  • Month by month results of live client trades
  • Performance statistics of every trade the system has executed live into the market

We highly recommend you consider the live results executed into the market when reviewing a forex managed account service.

If you can only see backtested results on historical information using computer models but no live client trades, then politely tell them ‘Thanks, but no thanks.’

Gross returns versus net returns

Wouldn’t it be nice if your managed accounts charged zero fees?

In the real world, it takes years of focus and a strong mindset to get to the level of being a professional investment manager, trading other people’s money. Trading is one of the toughest endeavours in the world to master.

As a result, investment managers and Forex managed account services like Walker Capital, charge certain fees to deliver your results.

The fairest model is a performance fee. No doubt you have thought about this when your industry super fund has a losing year but still charges you thousands of dollars for the privilege of losing money.

For details of Walker Capitals Fees and Charges please refer to our Financial Services Guide

 

Reviewing the fund performance based on the fees charged

One of our main goals at Walker Capital is full transparency, which is why we are putting this post together.

We want to make sure you have all the information at your fingertips so you can make an informed decision.

You can be assured the equity curves and month by month statistics on the four main systems we trade at Walker Capital are based on live trades in the market.

Having said that, it is important to note our figures are net returns have taken into account the fees and charges.

Hopefully, this post helps you understand the importance of real performance trading results based on live client accounts and not just hypothetical returns based on backtested data.

Are you interested to find out more?

Getting started with our selection of managed Forex investment is simple.

Here are the steps to get started:

  1. Schedule an appointment (Conference Call) with an Investment Manager
  2. Submit a Managed Discretionary Account (MDA) application with Walker Capital Australia.
  3. Open a trading account with the Walker Capital Australia’s executing broker.
  4. Select from our range of investment strategies and choose your asset allocation between the choices of accounts.
  5. Once all accounts are opened and funds have been chosen, our team gets to work and begins trading.

We welcome you to give our team a call to discuss your investment goals and objectives.

You can call Walker Capital Australia on +61 2 8076 2210 and we’ll see how we can help you achieve your investment goals.

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Backtesting | 5 MIN READ

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Oct 6, 2017 8:16:00 PM

Corporate Member of Institute of Managed Account Professionals – IMAP

Corporate Member of IMAP

Walker Capital is an accredited and recognised as a corporate member of the Institute of Managed Account Professionals (IMAP).

IMAP was formed to bring together advisers, managers, platforms and other managed account service providers to help build a better industry.

The role of IMAP

Institute of Managed Account Professionals (IMAP) is the industry organisation for advisers, managers, providers and other businesses actively involved in offering or supporting Managed Accounts.

IMAP provides association members with access to the latest developments in the industry; education and training and access to industry professionals at all levels.

IMAP is the voice of the managed accounts industry and represents its interests to regulators such as ASIC.1

1. reference  https://www.imap.asn.au/


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Memberships | 5 MIN READ

10

Mar 31, 2017 8:12:00 PM

What is a Forex Investment Account and Where Can it Fit in Your Portfolio?

Investing in managed funds is a popular strategy for people who lack the time to learn the detailed workings of the markets. It is also a common investment tool for those who want to diversify their portfolio but lack the time and expertise for stock picking.

Until recently most managed funds have focused their investments in the stock markets. This is understandable as most managed funds were set up primarily to invest in companies (with tradeable stocks) that deliver capital growth and dividends.

Forex investment account – a new form of managed investment

But over the past five years a new type of managed investment has been available to investors.

Forex investment accounts, which are focused on investing in the forex markets, are growing in popularity particularly for those who want to capture the massive opportunities in the forex markets.

The global forex market, which is also known as the currency market, is the largest and most liquid of all the financial markets. It has an estimated daily average trading volume of $4.8 trillion, which means it dwarfs all other markets combined.

The sheer size of this market makes it an attractive source of income and capital growth for investors across the globe.

But there’s a lot more to the forex markets than its size.

Characteristics of the forex market:

Liquidity–as the most traded financial market, the forex market offers almost unlimited liquidity because of the constant stream of buyers and sellers.

The forex market attracts a wide range of participants including investment banks, corporate traders and individual private traders and investors.

Access to global markets–since the forex market deals with the buying and selling of currencies, transactions usually involve dealing with investors around the world. Trading and investing in currencies automatically gives you the opportunity to tap into international markets, which provides more investment prospects.

24-hour market–unlike stock markets that only operate during usual business hours, the forex market operates on a ‘follow-the-sun’ schedule. The three major financial centres – Asia, UK and the US – which serve as hubs for forex transactions, provide continuous trading operations 24-hours a day five days a week. This means you can trade forex almost any time of the day, not just during office hours.

Access to multiple currencies–the forex market gives you the opportunity to capture the price movements in different currencies.

The reality is some currencies move faster than others. Then there’s the price difference between currencies, which explains the varying exchange rates.

When you’re trading forex, you want to be able to capture the price moves and price difference between currencies as they provide the profit opportunities.

Trade long and short–one of big advantages in trading forex is it allows you to trade long or short. In fact, when you enter a forex trade you are automatically going long (buying) one currency and going short (selling) the other one.

This means depending on your analysis or view of where a currency will move, you can place a long or short position.

For example, if based on your analysis, you think the US dollar will weaken against the Japanese Yen, you can place a short trade on the USD/JPY pair, which reflects your view.

This also means you can easily reverse your position (and go long the US dollar) if your indicators show the price movement is going to the other direction.

The ability to go long and short is an important consideration for traders and investors as this means you can capture investment opportunities whether the markets are going up or down.

Is the forex market for everyone?

But despite its size and liquidity, the forex market has not always been accessible to retail investors and traders.

This is because institutional traders – including the big investment banks – have been the dominant participants in the forex market.

Internet opens up forex market to retail investor

However, the coming of the Internet and online trading platforms has opened up the forex market and made it accessible to retail investors and traders.

Though institutional investors still dominate the trading in forex markets, the fact is the number of retail traders and investors trading this market is increasing every year.

And why not? As more people seek growth opportunities for their investment, the forex market is becoming more attractive particularly to those who want exposure to global markets.

The growing popularity of forex investment accounts

Another factor making the forex market more accessible to retail investors is the growing popularity of forex investment accounts, which are managed by professional traders and investment managers.

If you are one of the results-oriented and self-directed investor, you must be familiar with the stock market and managed funds.

Investors who don’t have the time nor the inclination to trade shares, but want to generate income and growth from the stock market, usually invest in managed funds.

When it comes to the forex markets, using forex investment accounts is the equivalent of investing in managed funds.

Benefits of including forex investment accounts in your portfolio

Diversification

Using forex investment accounts is a great way to diversify your portfolio. This is because you are tapping into a different market offering high liquidity, global accessibility and numerous income opportunities.

The main benefit of using forex investment account is your ability to take advantage of the growth opportunities in the forex market. Even if you are not trading forex (currencies) yourself, you can benefit from the trading opportunities and growth from the forex market.

Access to professional traders

One of the big advantages of using a forex investment account is you have professional traders who do the trading for you. These professionals are the ones analysing the markets, identifying and executing the trades on your behalf.

Forex investment accounts are also ideal for investors who want to take control of their financials while not totally being absorbed by the daily grind of the markets.

How to include forex investment accounts in your portfolio?

  1. Do your homework

Like any other investment opportunity, you need to do your homework. Research and analyse a number of forex investment account managers before you appoint one.

  1. Select a forex investment account manager/provider

The most important thing to remember before you appoint a forex investment account manager is whoever you select will be the one to execute your trades and manage the account for you. This means you need to be fully convinced your forex investment account manager is trustworthy.

Here are some of the things you need to consider before you appoint a forex investment account manager:

  • Track record in the markets – it is wise to appoint a forex investment account manager who has several years of experience in trading the markets. This means a person who has experienced the different phases of the markets and who knows how to handle and manage those situations.
  • Multiple investment/trading strategy – it is important your forex investment account manage has several investment strategies they can employ. This is because markets tend to have cycles which require different trading techniques. Using multiple trading and investment strategies will ensure your forex investment account manager can still capture opportunities in different market conditions.

For example, your forex investment account manager may trade only forex majors as a strategy to capture more liquidity. Another strategy would be to trade emerging markets currencies or forex crosses.

The most important thing to consider is your forex investment account manager uses multiple strategies because you don’t want to get caught in a market moving against you when you only have one strategy, and it’s not working.

  • Transparency –similar to your other investment vehicles, you should know all the numbers relating to your forex investment account. For example, if your manager is charging commission or a monthly fee to manage your account, these should all be explained to you upfront so that there won’t be any surprises.

 

  1. Allocate fund to your forex investment account

A forex investment account is another investment vehicle that could be part of your overall portfolio. As such, you can allocate a certain portion of your investment capital to it.

This will ensure you have diversification in your overall investment while gaining access to the world’s largest financial market.

Here are some items to keep in mind when you’re considering a forex investment account:

  • Your forex investment account will be under your name
  • You have total control of the account
  • You can give instructions and investment preferences to the investment manager
  • A highly qualified professional investment manager will trade and monitor your account on your behalf
  • The investment manager will make the day-to-day trading decision and execute trades on your account

As you can see, the forex market is a massive one offering many investment potentials. Like the millions of investors who are participating in this market, you can also grab these opportunities as part of your investment portfolio.

And if you believe a forex investment account is the best way to be involved in the forex market, there are forex investment account managers that can help you in the process.


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Uncategorized | 5 MIN READ

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Feb 1, 2017 8:02:00 PM

Calculating Pip Value and Lot Size

The pip value needs to be calculated with the currency outcome in mind. Currency pairs can be segmented into direct, indirect and cross currency pairs.

Calculating Direct Currency Pairs

If calculating in AUD then a direct currency pair calculation is selected. This refers to the quote currency to be the currency of the outcome, e.g. Direct = CHF/AUD,

Direct currencies where AUD is the quote currency then the following formula can be used: 1pip = lot size (100,000) x tick size (0.0001) = $10

Calculating Indirect Currency Pairs

If calculating in AUD and the base currency is AUD, then an indirect formula can be used, e.g. Indirect = AUD/USD, AUD/JPY, AUD/NZD, AUD/EUR

1pip = lot size (100,000) x tick size (0.0001)/ currency rate = $10.78

For example if the UAD/USD is trading at 0.92710 then: 1Pip = 100,000 x 0.0001 / 0.92710 = $10.78

Calculating Cross Currency Pairs

Direct currencies where AUD is not either the quote or base currency, e.g. Cross = EUR/USD, GBP/USD, GBP/JPY, USD/CAD, then the following formula can be used

1pip = lot size (100,000) x tick size (0.0001) x AUD/base currency/ currency rate = $10.45

For example if the EUR/USD is trading at 1.48375 then and the EUR/AUD is trading at 1.55110 then: 1Pip = 100,000 x 0.0001 x 1.55110 / 1.48375 = $10.45

Position and Lot Size Calculator

To make it easier for traders we have created a position and lot size calculator.


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Uncategorized | 5 MIN READ

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Jan 30, 2017 7:52:00 PM

Our Managed Investment Accounts aim to achieve high returns p.a.

Starting in Forex and CFD trading?

Up means good. Down means bad. Green is good. Red is bad…

There’s more to trading than just two colours and luck. Trading with this mindset, is a very long AND expensive road. A road we’d never wish on our clients.

Get our essential Walker Capital Forex & CFD beginners guide before risking it. This guide will show you everything there is to know about starting in the Forex & CFD trading.

11 topics covered in the guide, including:

11 topics covered in the guide, including:

  • Getting started with Forex & CFD,
  • Forex & CFD: Risks, Similarities and differences,
  • Understanding MDAs: Why you need an MDA,
  • Swing Trading: Achieving success,
  • Trends & Trendlines.

Pro-tips used everyday at Walker Capital:

  • Fibonacci Retracement,
  • Fundamental analysis: 2 Approaches to Fundamental Analysis,
  • Technical Analysis: 10 rules of technical training.

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Read the full article and more download our FREE Insiders Guide to Forex and CFDs. That’ll Help to Improve Your Forex & CFD Trading Skills and Assist You to Make Consistent returns!

Uncategorized | 5 MIN READ

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