FX MANAGERS
risk management rules as you go along if need be.
JW What should an inexperienced trader watch when choosing a time frame?
FB His horizon of trading should match his
time frame. No point in using Yearly charts to trade intraday.
JW How many execution brokers do you
use? How do you split execution between electronic and voice?
FB We only offer managed accounts and
can deal with as much broker/dealers than we have clients however we chose one for the overall quality of its service and software which enable us to give- up to all our clients very efficiently. 99% of all trading we do is electronically.
JW Which historical data do you use when developing your strategies?
FB We chose the most accurate intraday
tick data available. The most important thing is to always use the same data in order to stay consistent throughout your back testing in and out of sample.
JW Which soſtware do you use in the research, risk and reconciliation functions?
FB For research we have developed our own
in-house software that we use in conjunction with CQG system.
JW Which opportunities and risks do you
see in ultra-high frequency trading for FX managers?
FB In order to make money in ultra high
frequency trading in any asset class you need a technological edge as well as a great amount of capital and a rigid set of risk management rules. The risks are evident in the liquidity aspect of the game.
JW How does liquidity impact the efficiency of your strategies? Have you already explored to what AUM limit the strategies would allow you to grow to?
FB We have chosen to trade the market
we knew the most which happened to be the most liquid market in the world, the FX spot market. Every day new counterparties call us to give us more liquidity. We have set a soft close at 500M.
JW What is the biggest strength of your team?
FB Our biggest strength is the mix of
well seasoned people working together and bringing a unique expertise ranging from trading, risk management and programming. On top of those key aspects each partners bring on a distinct yet complementary strength in management, business development and creativity which keep us flexible yet disciplined and laser
focused to reaching our goals.
JW Can you give us your feeling about the
move of the EurUsd in the next 6/12 months?
FB As I answer this question the Euro has
already lost 10 big figures in November alone, from 1.42 to 1.32, and although I strongly hope it retraces back up on a normal retracement, I believe that there is more to come on the downside unless the European government comes up with an aggressive plan quickly.
JW What’s the best advice you would give
to traders who want to enter the FX fund management industry?
FB Think twice. You will have 2 portfolios
to manage, your investment portfolio and
your client portfolio. If 100
potential clients promised you a seeding investment maybe 1 will step up to the plate however with a seeding 10 to 20 times smaller than what you thought.
Let’s say that you go with it. Good luck
with making money for the next 3 to 5 years while surviving with little or no cash flow. If by magic you can achieve that, you will at best get the most common replies to your business development effort: 1- call me when you have 2, 3, 5 years of real track record and 2- call me when you have 50, 100, 300M AUM. Good luck with that. However if you stick with it and continue to build it, they will come.
FX
FX TRADER MAGAZINE January - March 2012 57
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