FAQ
Frequently Asked Questions
In summary, how do you work?
You will open a Forex trading account under your name with our Broker. Your account is then traded by me via a limited power of attorney and at the end of the month I will receive performance fees only when I make profit and capital or compounded capital must be positive. I only make money if my client makes money.
How and When will performance fee be calculated monthly?
All months performance fees will be calculated within 3 days of the next month. If your account is opened at 22th of February, the first calculation will be from 1st to 3rd of March. It is based on new month high water mark and, fees deducted only when client makes profit. For example, client invested $20,000 and monthly performance fee is 30% out of the profit. If the profit is 10% which is $2000, client will get 70% of $2000 which is $1,400 and 30% of the profit which is $600 goes to the trader, me. When client wants to compound the profit, next time the trading size will be automatically adjusted based on $21,400 which is treated as next compounded initial amount.
What are the fees?
The performance fee is 30% of the profits of a particular month. A High Water Mark system is used.
What this means is that a performance fee is charged only if your account reaches new highs at the end of the month. For example if we assume a $2,000 account reaches $2,500 at the end of the month, I will charge 30% of the $500 gain which is $150. Client's new account balance is now $2,350. If next month the account drops to $2,000 I will not charge any performance fee until the account goes above $2,350 again. And in that case I will only charge the fee on the difference between the $2,350 and the new account balance.
How much do I need to get started ?
The minimum required is $1,000 USD.
What return should I expect?
I make no claims for future performance. However, based on past experience I work to get monthly consistent net 5% monthly rate of return to the client.
Can I withdraw money from my account
It’s your money and you are able to withdraw it anytime you want. However, I ask that you limit your withdrawals to the end of the month. Also you are strongly encouraged to give me six months so that you can see your principal accrue.
The nature of the financial market is such that prices could be ranging for a particular month or two hence for these months one would not see much profit or lose. But then prices break out and we have profits rolling in.
What happens once I place the funds into Oanda and give you limited power of attorney?
Limited power of attorney ONLY allows me to trade your FX account on your behalf. I cannot withdraw any of your funds. Your funds are under your control and can be accessed when you want.
Can I withdraw my money and close my account any time I want?
Yes. This typically takes one to three days. There are no time limits or penalties of any kind.
If I do not withdraw profits, do they reinvest i.e. compound automatically?
Yes, eventually profits left in your account will be considered an addition to principal, and will be factored into trade size calculations for future trades.
Can I stop my account from being traded at any time I choose?
Yes. To stop trading, you submit a revocation of the LPOA which originally authorized the trade manager for the managed program to place trades in your account. You submit this to the broker using the link found on the broker's web site. Their web sites are open 24 hours a day. To withdraw funds, you simply execute a withdrawal just as you would normally from any other brokerage account, according to the procedures the broker uses.
What are the benefits of portfolio diversification, such as by opening a managed Forex account in addition to my other investments?
Here are some reasons to diversify. 1) Investment advisors have always advocated diversification. 2) Most investor portfolios are heavily concentrated in the stock market and or bond market. 3) Most of the 8,000 mutual funds are highly correlated to each other and the market. 4) Protecting yourself from the risks associated with investment concentration is important to your financial well being. 5) Forex is not correlated to the stock market, so it provides true diversification to lower your overall investment portfolio risk. 6) Forex offers profit/loss potential regardless of market direction, unlike some other markets (no “Bear” Market).
How do I verify the status of my account?
When your managed forex trading account is opened by forex brokerage company, you are issued a Username and Password which enables you to view and monitor the status of your account 24 hours a day. Through this Login, you can view a complete history of all closed trades as well as the status of any open trades.
