Always nice to hear from a fellow Sovereign life member, and by all means post a question at that forum too – some other members may care to post their replies.

Regarding the Chrome account: I’ve been keeping the promotion relatively limited, although I’ve known the traders behind it for some years now, and I’m convinced of their ability and experience. And after as many experiences as I’ve lived through, I’ve become both more cautious and at the same time increasingly definite about what it is that can be considered a good risk. Mostly the traders behind Chrome run scalping accounts with what I believe is an exceptional data feed. But, they are still like all scalping systems with their high probability trades versus large stop-loss orders (and consequently unfavourable risk v reward trade ratios). I’ve seen some great progress, as well as seen occasional fairly significant pullbacks. They trade some fairly advanced concepts in their newer accounts, and I don’t think it’s in dispute that they are aggressively geared. And that’s fine if you understand and accept in advance the pros and cons of such an approach – which could lead into another topic in itself.

Regarding that 53% haircut: it actually represented a total portfolio loss in some cases, that is with those accounts that were over-leveraged and not sufficiently capitalized to absorb a worst case scenario. To a greater degree there was already a plan set out for that in advance, in that we specifically leveraged those lost accounts by twice the amount for the range it was intended to trade, and before doing that discussed with those clients the possibility of having to float those accounts through any period of adversity. However, in the event, the simultaneous combination of AUD v NZD strength, and weakness of EUR vs CHF pushed them further and faster than you might otherwise think is “probable” given the core logic of the system (stopless regression to a long term mean average).

None-the-less, I do confess that I hadn’t give enough forethought to the absolute worst-case scenario at the outset which resulted in those losses, and the need to hedge. It’s been the stimulus for a significant overhaul of our systems, and in the month since I’ve essentially been trading all client accounts back to flat, one trade a time in a manner set out via regular and direct communication with each client. Please check back to the blog later today, as I’ll be making a new post with charts and methods to give even more transparency to what’s being going on behind the scenes recently.

From a business perspective, my main focus is on accumulating an attractive track record based on disciplined, hard-stop entry trades with favourable risk:reward ratios. Fibonacci numbers essentially form the core of this method. To apply myself fully, client aquisition and marketing are taking a bit of back seat for me, although I’ve some help in that department, by Gary (who’s also responsible for the creation of this new site).

My thoughts on the PIIGS: Well, usually what occurs when there’s an issue with a country (or the whole global economy right now) is for the government to rack up some more debt on the nation (on their own citizens, actually) and simultaneously creating a whole load more “paper” currency. Of course, the more of it you print, the more it devalues… and that’s a big part of the reason why countries like Australia (which don’t need to print as much money) have kept stronger currencies relative to the others. Nothing new here… it seems EUR is a good short bet, but if there’s one thing I have learned above all else – it’s to consider the worst case every time you open a trade. No matter how sure it seems, no matter how much the fundamentals support the trade… think about where you will draw the line in the sand to take any loss if it goes against you.

So Pete, probably the best advice I can give you is to keep doing what you’re doing: enquiring about the worst case first and keep an eye on where we go from here. If you’ve got anymore questions, I hope we’ll be able to muster a reply worthy of the time it took for you to make an inquiry with us.

Kind Regards,

Adam

Your services were introduced to me via David MacGregor (Sovereign Life). I was particularly interested in your NMI Chrome FX Managed Accounts. I was about to call David and ask if he had had any feedback from his clients about your service. ( I didn’t though!) Instead, I thought I’d go to your site and do more research. I could not find the Chrome account mentioned. Has it been ’shelved’?

I am pleased with your honest commentary that gives an insight to your trading ‘habits’.

I am however concerned that you took a 53% haircut on the “FX miner”. It suggests to me that you had no firm trading plan in place – a plan that might have allowed for (say) a maximum loss of 20% in any given month resulting in an exit from all trading positions and a halt on trading following a review & monitoring of the market for (say) the next month before entering the market again.

Your comment……

This gives a trader time to develop a trading plan to deal with the situation.

…….. seems to confirm the lack of trading plan to cover amongst other things, a potential belting in the market.

In current times when the markets are extremely volatile, a trading / money management plan is essential…… as it is at anytime!

I am keen to invest with. Can you give me your thoughts on the next few months as the PIIGS get roasted and banks run out of ‘paper’ (Monopoly) money.

Hope to hear from you soon,

Cheers,

Peter

PS – $1AUD = $1USD surely by end of year when the world is yet again in total financial meltdown. What are your thoughts / plans in that event?