Question ForEx traders, help!

My friend's father is entertaining investing $50k into a ForEx privately managed account. What questions to you suggest he pose to the portfolio manager in confirming and verifying the fund's performance?

Thanks for any and all help!

 

Well, first of all, look for a track record. Get 1 year performance on a LIVE account. I don't know how many clowns show a demo account statement or some backtest statement. Get drawdown and risk information like the number of lots traded vs. account size. Ask them about money management as well, but I assume it will be some kind of % based of account. If you see really large trades as compared to the account size, these guys are not in it for the long run. Funds are built slowly over years unless high risk is taken. Ask them what type of strategy they are using...trend following / counter-trend..etc etc.

For example, if they tell you they use some kind of martingale strategy, then I would be wary.

PM the details if you want. It may be worth looking at.

 

Thanks, JB!

 

what kind of return they have?

 

unless 50K is like 20 dollars, and the person has money to lose. I wouldnt trust anyone with a managed forex account. The volatility in price bands very extreme. And minimal positioning size, even on a large acct , and only gross trends can be scaled into and scaled out of.

 

STAY AWAY !!

 

Instead of asking questions, just telling them the name of your godfather and his businesses, then see if they will turn you down or not.

 

That should be enough to last for a few weeks, I guess.

 

Ask them what who there broker is? Make sure you understand in full what method the manager plans on using to pay themselves? Ask them if its spot market or futures? Ask them if they trade any other instruments? Ask them if they have a systematic strategie or a fundmental based stretgie? if systematic, do they or have they have adjusted the system, or not followed it exactly? With all of these questions, you should be able to spot a scam?

You start hearing bucket shop brokers names, especially ones outside the U.S., and they start telling you they will deduct there portion of the returns from the account, and that they trade the spot market with a fundamental strat that they sometimes stray from when the dabble in CFD's, run. And use your middle finger on the way out.

- secXces