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Fx Experts – facing the reality and staying calm
Tags: No Tags.Ok I just had to comment on the recent noise. The article by HansG “FX Experts: a fresh but troubling perspective” raised a bit more hell on the forums than it had to. Today I just mentioned it here, now I want to go into more details.
In general HansG is right and his article must be taken seriously. He always bases his researchs on facts and although a bit too paranoid, he’s never unreasonable.
The fact that the current trading of Fx Experts is not doing well is particulary proven to be true, as we know that a program based on its trader arround April 20th was in about 20% loss for Apri (However there are open positions and this loss could turn into profit or become bigger until they gte closed). We don’t know for sure if FXE is traded in the same way as that program’s account, but we can assume that this is true based on Marcos’ comments in Hans’ blog.
So what… should you worry? It depends on what do you excpect. When I joined FX-Experts – after making almost 100% sure that it is not a ponzi – I knew making 0.5% – 1% average daily in forex is not a joke at all. There are only 2 publicly known programs currently which does such high profits constantly and one of them is pretty suspicious. So, if you want such high profits you must be prepared for the risk of loss. It is very different from the fraud risk in the ponzies though. Eventual loss in FXE won’t blow all your funds. It may simply empty the reserve and force Marcos to apply some % loss to the accounts. And this is a bad scenario.
From what we know FXE are doing aggressive forex trading and thus achieving good results. However these results are not the ones which you see in your accounts. FXE may profit 30+ % in some month and only 5% in the other. This still makes 17.5% average for both months – pretty enough to get paid the usual ~3% weekly to our accounts and have some profit for themselves.
What is a good trading strategy? Can someone make 20%+ every month constantly? I would say no. Can they make average 20%+ monthly for a long period of time? Yes, that is possible. Lets take the following imaginatory results for 12 months:
1 – 5%, 2 – 36%, 3 – -9%, 4 – 15%, 5 – 27%, 6 – 10%, 7 – -7%, 8 – 42%, 9 – 19%, 10 – 33%, 11 – -4%, 12 – 16%. This makes 15% monthly average, without calculating compounding. Of course this is pure speculation, but it is just to illustrate that a good trading strategy does not mean that the trader should constantly win. Isn’t this better than making 8% monthly each month? Sure, the second involves less emotions, but the result is much lower.
Fx-Experts like any other program based on real trading is for long term investors. The investor should be prepared for gains and for losses. Marcos strategy not to apply the real trading results to the accounts is preventing you from the emotions, but you should still be prepared for unnice surprise sometimes. Only the time will tell how good FXE trader is – we need at least one year to be able to say that. Yes, there is a risk of failure, but there is no place to worry just because they are having one bad month.
The points which Hans raises are very valid, but I can’t udnerstand the shock they cause in the community. There is no such good profits without risk – I know that and am still very happy for having the opportunity to participate in real aggressive trading program. Just approach FXE with the caution which such a risky business requires even if the fraud risk is zero. But to be surprised that it is risky – well what did you expect?!
There is a lot more things to worry in the high yield world than Fx-Experts. I prefer to calm down. At least for now.
Mbongwe, HYWD Blogger
Popularity: 2% [?]
Great write-up….
Umm, they did lose at some point during the month, but Marcos already said at HansG’s blog that they have recovered the loss and have a reserve fund equal to P of the current invested total. I honestly believe that your post should be edited to reflect this because it is unfair to mention the 20% loss without pointing out that the trader has already made that back.
99% of those who speculate in commodities lose. Brokers will tell you that only 90% lose because they want you to believe you stand a chance at winning. Hedgers are the winners but they are not trading for speculative profit they are trading for protection against unforeseen market movents against the commodity that they produce or invest in.
Those who own seats on commodity exchanges do make money but they are making it off handling the trades that others place into the market or by various ways of “scalping” orders.
For an outside speculator to be sucuessful he has to have a way of trading that makes him right 85% of the time. He has to cover previous losses, bad fills, errors, trade commissions, and other expenses involved in trading. This he has to do in a market where price movements are produced by random events in the world economy. This is extremely tough to do and that is why 99% are not sucuessful in trading.
My personal opinion is that if an hyip program is telling you that they are making money by trading stay away from them.
what jorhyne said ^^
“we know that a program based on its trader arround April 20th was in about 20% loss for Apri (However there are open positions and this loss could turn into profit or become bigger until they gte closed)”
According to the latest information about this (rabbit’s post at HYIPD forum) these open positions had not only recovered the loss, but were in profit too, 10% currently.
The reserve funds cover up to 50% of the pooled funds, and were not touched to recover this ‘loss’ that never actually existed.