Fx Index Report

Overall, we were not successful when looking at profits and losses. We implemented a diversified strategy by investing in currencies and commodities. We would focus on a few weakening currencies and a few strengthening currencies. The strategy was good in concept but lacked more active management. By diversifying in gold and silver in several currencies we diversified and could reduce risk. Our implementation of the plan happened and was successful at times like we planned. It is that saying “Know when to say when” that we did not follow. We struggled to monitor our positions. By not actively managing or implementing stop- loss orders we did not capitalize on our strategy.

When comparing to benchmarks such as the Parker FX Index we were below the index. The Parker FX index looks to make over 11% annually and we were not even positive. It is important to note that when FX trading there are going to be poor periods where money is lost. Last August the Parker FX Index had a negative return with a majority of the firms that make up the index not posting positive returns. For our 3 month session we should have been able to reach a positive level and never did.

I feel the main factor we did not reach our goals and were not successful was the lack of active management. I am confident that we made good judgments on positions and posted positive returns after our positions were made. The problem was not monitoring that position and not closing out of the position. Also, it is important to understand the effects of news on currencies. Certain news can have a severe impact and you need to be able to react to reduce the impact on your positions.