FX Market Watch
that an investor can turn a trading strategy into an investment. Tere are thousands of managed accounts in the world, each offering a unique strategy and approach to the markets. Although managed
accounts
currently mostly dominated by c ommod it ies traders, there is a growing emergence of FX managed accounts.
Tere are other ways investors can turn trading into investing, such as the active investor who purchases an automated trading system to trade their own account. Tere are a growing amount of companies that offer fully au t o m at e d systems investors can lease or purchase that can be executed on their own account.
Modern day hedge fund is a family farm
What is a farmer? A farmer is similar to a hedge fund manager. Farmers are seen as old men with pickup
40 FX TRADER MAGAZINE April - June 2012 are
trucks, straw hats and mud on their shirts. Aside from this stigma, farmers are actually some of the most sophisticated investors; a farmer must decide constantly where to invest and when to hedge. His family, and
‘organic’ business. Many family ‘mom and pop’ businesses are run in this style, but farms illustrate the basic needs of knowing when to hedge due to a bad growing season, crop rotation, and investment in farming machinery.
Who is running the show, the humans, or the computers? Are the humans telling the computers what to do or are values on the computer screen telling the humans how to behave?
possibly the entire town, depends on the farms’ survival. Tere isn’t any room for creativity or unnecessary investments (such as purchasing a decorative rug).
Te origins of the futures markets are based on agricultural and eventually industrial demands for hedging
Te future of investing could see a return to family run hedge funds, what Trusts refer to as ‘family offices’ and boutique investment firms offering niche s p e cia l ize d services to a small elite group of clients. Tis trend is already taking place, as London based boutique broker Shore Capital revenues are up 12 percent, beating larger rivals.
“I think there’s
a change in the attitudes of fund managers – they used to give a significant proportion of business to the bigger houses because they thought they were a better counter-party risk.
“I think the institutions no longer think they are a superior counter-party risk, having had the experience of last
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