I recently had lunch with a client of mine and thought I'd share her thoughts with everyone (with her permission, of course). She related to me how she allocates part of her investment portfolio for speculating in the fx market. She used to be an active trader, but these days, instead of trading her own account, she simply looks over her accounts with different fx managers. This way, her risk/reward is not limited to one method--her own, but through a number of fx managers with different methods altogether.
Instead of trading her own account, she farms them out to different fx managers. She opens a managed account with different fx managers with the least minimum. At the end of each month she allocates/de-allocates funds from each fx manager depending on their performance. If manager A makes a 10% profit, she then adds 10% more funds to her account with that manager. If manager B lost 10%, she de-allocates 10% from that manager.
She has managed accounts with 9 different managers at the moment--4 are making money for her, which is more than enough to cover for the poor performance of the rest of the managers. According to her, it never gets to the point where any one single fx manager blows out her account with them. On the first month, she can tell if she needs to close out a managed account due to poor performance or if that were just a losing streak.
I did a quick check on this by going to http://www.fxmanagers.info/ and added all the monthly average returns from each manager, then divided the sum by the total number of managers. The averaged return from that list was -1.11%. In hindsight, if I were actively managing my funds with these fx managers, I'd probably get a better number than this by weeding out the losers and adding more funds to the winners.
This looks like an interesting strategy. Is anyone else doing this? Can you please post positive and negative feedback on this?
thanks!
- jim
Instead of trading her own account, she farms them out to different fx managers. She opens a managed account with different fx managers with the least minimum. At the end of each month she allocates/de-allocates funds from each fx manager depending on their performance. If manager A makes a 10% profit, she then adds 10% more funds to her account with that manager. If manager B lost 10%, she de-allocates 10% from that manager.
She has managed accounts with 9 different managers at the moment--4 are making money for her, which is more than enough to cover for the poor performance of the rest of the managers. According to her, it never gets to the point where any one single fx manager blows out her account with them. On the first month, she can tell if she needs to close out a managed account due to poor performance or if that were just a losing streak.
I did a quick check on this by going to http://www.fxmanagers.info/ and added all the monthly average returns from each manager, then divided the sum by the total number of managers. The averaged return from that list was -1.11%. In hindsight, if I were actively managing my funds with these fx managers, I'd probably get a better number than this by weeding out the losers and adding more funds to the winners.
This looks like an interesting strategy. Is anyone else doing this? Can you please post positive and negative feedback on this?
thanks!
- jim
youtube.com/@jimstradingjournal