What were they thinking?

Recently, a group of forex investors were cut from their investment, only to find that the money manager that they trusted had completely burned their accounts.

People that only had a few thousand dollars invested, were left with double digit accounts.

I asked one of these individuals about the money manager; and was shocked to find out that he was Not recognized by the NFA.

People, the NFA is there to help. It is an institution that is built around monitoring credited FX professionals. Anyone that claims to be a money manager, pool operator or introductory broker; should be registered and monitored with a government agency. It stuns me that people are yet not conscious to these small details, which may one day save them much grief.

Think of this; even barbers need to get licensed...

FOREX Certified CTA's are hard to come by

Thats right, most FCM's (Futures Commission Merchants) who work with IB (Introductory Brokers), rarely require them to register or be certified.

The NFA (National Futures Association) is the federal body, who has taken the responsibility to keep a registry of all CTA's (Commodity Trading Advisors) who had passed the required examinations. By registering, an individual subjects themselves to the scrutiny and regulations imposed by that body.

A person who is serious about becoming a professional trading advisor would register, only to show potential (or even existing) clients, that they are trustworthy and are looking for a long-term commitment.

Unfortunately, not many merchants require that their IB's or CTA's be registered.
The Reason: The Law doesn't require it.

That's right; if you are in control of funds that you actively trade, and collect fees for these trades, then you are a money manager. The law states, that you are able to manage accounts for people, actively trade those accounts, as long as you don't exceed 15 separate accounts.

So as long as you have under 15 clients that you trade accounts for, then your good to go.

This is why it is difficult to find certified individuals in the FOREX market. The rules around this market, as well as other markets, are imposed by the government on a need-to-have basis.

At the moment, I don't think that people are loosing too much money in the FOREX market to raise too much concern. However, I predict that in the future, when losses in the FX market are so high, mostly due to incompetent traders - then you'll see the government begin to sanction how FCM's work with their partners.

Till then, I recommend to go with, and only with, a certified CTA/IB.

Automatic Trading

Automatic or Automated trading is now becoming the new frontier for investors in any market, to become fascinated and drawn to.

Simply put; automated trading is where a computerized system is performing the market orders. It would stand to reason, that a machine that can calculate millions of computations a second, properly record and compile information, as well as execute commands faster than we can think - that this tool should become the method by which all traders in the future will use.

I believe, that soon enough, each trader and every new speculator that invests in any financial market, will have to their disposal an automated trading system that will perform all the functions they require. Automatically, with or without the guidance of the investor.

Automatically performing market orders by putting in BUY SELL and CLOSE orders, is becoming easier to understand. As investing grows in the stock and forex markets, so do the medium of software platforms available to the investor to use.

As for now, the mist widely understood method of adding some 'kick' to the trading platform that is used, has been to add automated trading scripts.

The trading platform that I enjoy using is the Meta Trader from Metaquotes (www.metaquotes.net). This is the platform that our FCM uses, and I got to say; its pretty good. There are features in it, that let you create your own custom scripts - everything from custom indicators to automated trading.

The guys from Metaquotes get my full respect as fas as their attention to detail and user experience. With my software and technology background, I can say that I am impressed by the professionalism expressed within the make-up of this platform. I'll talk more about the Metatrader latter.

With excellent programs coming out every year, there is no doubt in my mind that there will be a huge demand for automated trading capabilities built into these platforms.

We shall wait and see.

Charting The Forex Market

Everyone that has traded on some time of finanacial market place; Forex, Stocks, Bonds, whatever, we all seem to share the common hasstle of reading charts.

A chart is a simple devise - it takes information that is found as numerical, and converts them into a graphical set of lines and color. A graph allows us to visualize the data set we find in any system, not just financial.

But a graph does much more that generate a picture, it also allows us to view the history and ongoing changes in the markets. A forex chart looks a lot like a stock market chart, or an Index chart. But what they share in common is the ability to give us a good understanding of a trend in this data.

Technical analysis is done by looking at the data present numerically, as well as graphically. With a graph, its easier to figure out the 'trend' of the market. Is it going up? Is it headed down?
A chart can easily help establish these points and help our technical analyst in the quest to 'predict' a future movement.

Money Management Accounts

The best form of capital that any financial firm can gain, is from any Hedge Fund or Money Management Account that is directly under management.

A Hedge Fund - disregard the terminology - is basically a money management account. This means that a bunch of money is put together and is then used to trade stocks, bonds, futures, forex, whatever.

A fund or money management account (also known as a 'pool') is a tool for investing money in the market. The body responsible for trading this pool, is interested in earning a percentage of the gross profit generated from those trades. Some fund managers also charge a management fee (usually 1-2%). This fee is charged on the basis that there is overhead in managing the account; before it even makes a profit. It's also in place to assure that the fund manager collects a nice cut, right off from the start.

Funds that call themselves 'hedge funds', are only using the name for its artistic value. A "Hedge" is a trading strategy that basically means that when you're unsure of a result, you should take 2 sides of that bet. This is better shown in enterprise class companies, that have employees scattered around the globe, and hedge their currencies against each other. This is done so that when there's a huge shift in the Euro vs. Dollar, the company doesnt need to pay extra Dollars to cover the salaries paid for in Euros.

At the end of the day, all banking institutions, hedge funds and pool operators, trading advisors and money management account operators, basically try to do the same thing.

IB - The "Middle Man" in any deal

IB or Introducing (introductory) Broker, is a title that is given to any person that establishes a business relationship between a buyer and seller, involving goods or services.

In the FOREX world, an IB is a person the brings clients to brokerage or member dealer in the interbank circle. The IB is credited with bringing this client and usually recieves a commission for their effort.

Gallant FX is an IB for Interbank FX (our FCM - Futures Commission Merchant). We collect commissions from Interbank resulting in activity generated from our clients.

However, Gallant FX goes beyond simple 'handshake' making. Gallant actively advises clients on how to improve their trading activity and on how to gain the highest returns.

We evaluate your style of trading, thus providing you with a solution that matches your abilities.

If our clients find that they are not 'built' for active trading, then they may also request that Gallant take power of attorney (POA) over their account (Non-Discretionary) and begin trading in our clients name (Money Management Account).

We like that.

Wecome to GallantFX

The FOREX market turns over trillions of dollars per day and are the world’s biggest investment medium. In recent years, FOREX trading systems using technical analysis to predict trend changes have become increasingly popular as a way of catching the big profitable trends.

GallantFX is a new company, dedicated to starting a new method of FOREX investing. Gallant is the by-product of technogy savvy individuals, who come from IT and Money Management backrounds - companies like eTouchWare Inc and Inuwashi Technologies.

This Blog will log details from our company's advancement in this area, as well as new steps that we're taking in defining our path and future outlook in the area of FOREX money management.

GallantFX is a CTA/IB (Commodity Trading Advisor & Introductory Broker) in the FOREX market. We are authorized brokers for Interbank FX, as well as have our Money Management Account (MMA) though them.

As Trading Advisors, we help our clients focus by providing consultation and guidence in their goals of becoming more successfull traders and gaining the most profits from this market.
As Introductory Brokers, we connect our clients with an FCM (Futures Commission Merchant).
Helping them setup and begin to actively trade.

These two roles are intertwined with one and other, which are roles we can offer our clients at no additional costs to them.

Thanks for reading and we hope that you enjoy our service!

Sincerely,

Simon Grunfeld
CEO
Gallant FX