#Understanding Drawdown

[stockexperttrading]

Drawdown in Forex Trading with FTG

The blog titled "Drawdown in Forex Trading – Understanding and Managing Losses" delves into the concept of drawdown in forex trading, which refers to the decline in a trading account's equity from its peak due to a series of losing trades. The guide emphasizes the importance of effectively managing drawdowns to preserve capital, maintain confidence, and avoid impulsive decisions during challenging market phases. The blog explains the different types of drawdowns, including equity drawdown and maximum drawdown, and provides a simple formula for calculating drawdown percentages. It discusses common causes of drawdowns in forex trading, such as market volatility, unsuitable strategies, overleveraging, poor risk management, and external factors. The psychological impact of drawdowns on traders is highlighted, emphasizing the emotional toll they can take, leading to self-doubt and anxiety. The long-term effects of drawdowns on trading performance are explored, including capital erosion and missed opportunities. Strategies for managing drawdowns are extensively covered, including risk management techniques such as proper position sizing and setting stop-loss orders. Diversification and asset allocation, utilizing trailing stops, revisiting and adjusting trading strategies, and the importance of analyzing historical data are also discussed. The blog emphasizes the psychological aspects of dealing with drawdowns, including maintaining discipline, overcoming fear and greed, and the importance of keeping a trading journal for self-reflection and growth. The conclusion underscores that drawdowns are a natural part of forex trading and can be opportunities for growth rather than failures. It encourages continuous learning, adaptation, and using the support and resources provided by Funded Traders Global to navigate the challenges and successes of forex trading.

[dandelionsresilience]

Good News - June 15-21

Like these weekly compilations? Tip me at $Kaybarr1735! And if you tip me and give me a way to contact you, at the end of the month I'll send you a link to all of the articles I found but didn't use each week!

1. Victory for Same-Sex Marriage in Thailand

“Thailand’s Senate voted 130-4 today to pass a same-sex marriage bill that the lower house had approved by an overwhelming majority in March. This makes Thailand the first country in Southeast Asia, and the second in Asia, to recognize same-sex relationships. […] The Thai Marriage Equality Act […] will come into force 120 days after publication in the Royal Gazette. It will stand as an example of LGBT rights progress across the Asia-Pacific region and the world.”

2. One of world’s rarest cats no longer endangered

“[The Iberian lynx’s] population grew from 62 mature individuals in 2001 to 648 in 2022. While young and mature lynx combined now have an estimated population of more than 2,000, the IUCN reports. The increase is largely thanks to conservation efforts that have focused on increasing the abundance of its main food source - the also endangered wild rabbit, known as European rabbit. Programmes to free hundreds of captive lynxes and restoring scrublands and forests have also played an important role in ensuring the lynx is no longer endangered.”

3. Planning parenthood for incarcerated men

“[M]any incarcerated young men missed [sex-ed] classroom lessons due to truancy or incarceration. Their lack of knowledge about sexual health puts them at a lifelong disadvantage. De La Cruz [a health educator] will guide [incarcerated youths] in lessons about anatomy and pregnancy, birth control and sexually transmitted infections. He also explores healthy relationships and the pitfalls of toxic masculinity. […] Workshops cover healthy relationships, gender and sexuality, and sex trafficking.”

4. Peru puts endemic fog oasis under protection

“Lomas are unique ecosystems relying on marine fog that host rare and endemic plants and animal species. […] The Peruvian government has formally granted conservation status to the 6,449-hectare (16,000-acre) desert oasis site[….] The site, the first of its kind to become protected after more than 15 years of scientific and advocacy efforts, will help scientists understand climatic and marine cycles in the area[, … and] will be protected for future research and exploration for at least three decades.”

5. Religious groups are protecting Pride events — upending the LGBTQ+ vs. faith narrative

“In some cases, de-escalation teams stand as a physical barrier between protesters and event attendees. In other instances, they try to talk with protesters. The goal is generally to keep everyone safe. Leigh was learning that sometimes this didn’t mean acting as security, but doing actual outreach. That might mean making time and space to listen to hate speech. It might mean offering food or water. […] After undergoing Zoom trainings this spring, the members of some 120 faith organizations will fan out across more than 50 Pride events in 16 states to de-escalate the actions of extremist anti-LGBTQ+ hate groups.”

6. 25 years of research shows how to restore damaged rainforest

“For the first time, results from 25 years of work to rehabilitate fire-damaged and heavily logged rainforest are now being presented. The study fills a knowledge gap about the long-term effects of restoration and may become an important guide for future efforts to restore damaged ecosystems.”

7. Audubon and Grassroots Carbon Announce First-of-its-Kind Partnership to Reward Landowners for Improving Habitats for Birds while Building Healthy Soils

“Participating landowners can profit from additional soil carbon storage created through their regenerative land management practices. These practices restore grasslands, improve bird habits, build soil health and drive nature-based soil organic carbon drawdown through the healthy soils of farms and ranches. […] Additionally, regenerative land management practices improve habitats for birds. […] This partnership exemplifies how sustainable practices can drive positive environmental change while providing tangible economic benefits for landowners.”

8. Circular food systems found to dramatically reduce greenhouse gas emissions, require much less agricultural land

“Redesigning the European food system will reduce agricultural land by 44% while dramatically reducing greenhouse gas emissions from agriculture by 70%. This reduction is possible with the current consumption of animal protein. “Moreover, animals are recyclers in the system. They can recycle nutrients from human-inedible parts of the organic waste and by-products in the food system and convert them to valuable animal products," Simon says.”

9. Could Treating Injured Raptors Help Lift a Population? Researchers found the work of rehabbers can have long-lasting benefits

“[“Wildlife professionals”] tend to have a dismissive attitude toward addressing individual animal welfare,” [… but f]or most raptor species, they found, birds released after rehabilitation were about as likely to survive as wild birds. Those released birds can have even broader impacts on the population. Back in the wild, the birds mate and breed, raising hatchlings that grow up to mate and breed, too. When the researchers modeled the effects, they found most species would see at least some population-level benefits from returning raptors to the wild.”

10. Indigenous people in the Amazon are helping to build bridges & save primates

“Working together, the Reconecta Project and the Waimiri-Atroari Indigenous people build bridges that connect the forest canopy over the BR-174 road[….] In the first 10 months of monitoring, eight different species were documented — not only monkeys such as the golden-handed tamarin and the common squirrel monkey (Saimiri sciureus), but also kinkajous (Potos flavus), mouse opossums (Marmosops sp.), and opossums (Didelphis sp.).”

Bonus: A rare maneless zebra was born in the UK

June 8-14 news here | (all credit for images and written material can be found at the source linked; I don’t claim credit for anything but curating.)

[centrally-unplanned]

I wanna get this one out before the election since I think that is going to "cast in stone" some takes when it shouldn't given how much of a coinflip it is; Biden really fumbled the ball in the second half of his presidency. I was very pro-Biden at the beginning, I thought he did a great job. I don't think the stimulus was a huge source of inflation and meanwhile the economy came back roaring; obviously not mainly due to him but he did a good job on renewing Jerome Powell (a Trump appointee!) to the Fed, controlling the Strategic Oil Reserve, and "getting out of the way" on a bunch of issues from trade to Covid policy. His environmental policy around the energy transition was stellar, I approve of CHIPS, etc. And in foreign policy he is never going to get the credit he deserves for ending the Afghanistan debacle, and meanwhile the US response to the Russian invasion of Ukraine was about as good as you could possibly expect it to be out the gate.

He actually proved the haters wrong on his promise to "get things done in Congress" using his expertise - he did in fact get bipartisan bills passed and work with centrists like Manchin to get party bills over the line. It was a solid showing; I thought he was clearly better than Obama & Clinton.

But as time went on the wheels really came off. You can almost see the "ideas" running out, like once they had done the Covid drawdown and BBB/IRA, and the midterms made congress more unfavorable, "what's next?" left a void. There was a bunch of bad "party handout" stuff that is completely at odds with how things work today. Foolish moves like the student debt relief - unpopular, unwise in an inflationary environment, a handout to the wealthy, and dubiously legal - or all the kowtowing to the worst unions in the US that still resulting in declining labor vote share! A lack of follow-through on the bills showed the admin's lack of policy chops; the IRA is severely hampered by the lack of permitting reform for energy projects, but the admin applied virtually no pressure to making that happen because, eh, not their vibe I guess? The huge holes in procurement that Ukraine war exposed has been met with very tepid responses as well, just a sort of "throw money at it" default that has fixed little.

Israel is of course peak inertia. I am a realist, I understand fully that there is no world where the US responds to a terrorist attack on an ally by cutting them off - and I think the Biden admin has had its wins in this category, the amount of aid entering Gaza is certainly higher due to US pressure. But it is just embarrassing how obviously Biden himself treated Netanyahu and co as like, credible partners, when they just aren't? Again, Trump would just happily support them doing w/e no matter how many the killed, it wouldn't be embarrassing for him to watch that happen. For Biden, with his stated goals, it is weakness. He could have easily done better.

And we can't ignore the responsibility to the next generation - it is your job as President to set up your successor for victory. Immigration is a classic policy example of that dropped ball - a fear of seeming "Trump-like" in the face of an unsympathetic electorate and an admin itself not actually committed to massive increases in admitted asylum cases. It would be one thing if it was Biden's hill to die on, but it wasn't; just years of muddle before finally doing in ~2024 what they could have done in ~2021, too late to move the needle on the backlash.

Which leads us to the elephant in the room, as all things must. He did end his nomination in the end, again I don't think he is some awful president. But he took a lot of heavy pressure to get there. And the weirdest thing is...he is the one who scheduled a debate before the convention? That isn't normal! It was very obviously a test, to show he was fit - and he failed it. And then refused to admit it. What if George Clooney didn't aim for his head in the press at the 11th hour? What if Nancy Pelosi didn't bring out the big guns? Would he have not bowed down to reality?

And while I have been quite impressed by Harris's campaign so far, and not having a primary has been an advantage, it has still been very rushed. Orgs take time to emerge, you can't actually just snap your fingers and get 30 interviews booked or a docket of vetted VPs. I think Tim Walz a mistake, personally! Not a big one, but a weak choice when someone like Josh Shapiro is right there and "pivot to the center" is your stated strategy. But it is hard to blame her when she probably threw it together in a few weeks while also doing 20 stump speeches a month and debate prepping and all that! I can't say that specific decision would change, but others would. Hell, time could have helped - her favourables in a ton of categories have slowly been ticking up, if she was the candidate since January things could be different. We will never know of course, but the more distance from Biden the better.

I think in 2023 and 2024 it is in fact very hard to find any solid wins for the Biden administration. I can think of a few but they outnumbered handily by the missteps. And I think that, if Kamala wins, a lot of this is going to be papered over. All the political missteps will be like "eh, who cares! We won, right?" But that is not how effective strategy works. For one, if Kamala wins it is only because Trump is the opponent; a normie Republican would probably have trounced her. But more importantly your strategy should pretty much never be "eh whatever" to maximizing your electoral odds. Every action should either be A: this will keep us winning, or B: this won't but it will make the world a better place and so it is where we are spending our points. Biden has had a lot of "neither option" these past two years; too many, in my opinion, to be considered a good president anymore.

But I will give him decent at least, it is a tough job!

[t-top-apologist]

At the end of the day the average civilian wishes to be catered to like an old money steel baron or perhaps one of those chaps from Downton Abbey. The entirety of modern society has come together to enable this, mass-producing cheap facsimiles of fortunes that should rightly either be built on child labor or perhaps serfdom.

Their lawns, taking up what could otherwise be used to grow crops or serve as "outdoor garage space," exist to ape the wide ranging estates meant for the nobility to chase down a fox while adorned in silly jackets. Their houses sport columns and stupid windows meant to imitate three different classical artforms at the same time because of something called "economies of scale." They even have male-centric social clubs meant for parlour games, discussing sports, and dining with friends, in this case franchised out under such names as "Buffalo Wild Wings."

This aping of the upper class continues to the hire of "artisans" to do relatively simple work deemed too complicated to warrant the time of the average citizen. It's not that the jobs are too taxing for your average person, but rather that the market has crystallized around the desire to live like budget royalty. Therefore they take their wafer-thin computers to artisans (now more commonly called "experts" or "Apple geniuses") for repair and have democratized the position of carriagemen to 22 year old dealership lube techs named Ryan who will turn a 15 minute job into a 30 minute endeavor thanks to frequent vape breaks and a brief brush with what the industry refers to as "a misplaced drain bolt."

The mid-40s project manager and mother of 3 is no less competent when changing oil than her grandfather before her who knew what "Valve Lash" is, but what separates the two is a series of wars in the 1900s that required an entire generation of men to become very familiar with operating and repairing machines better than the Germans and Japanese (an exercise that Chrysler would later abandon in favor of the phrase "if you can't beat em, join em").

This conflict ended with a surge of able-bodied men finding themselves returning to their project management jobs (like their granddaughters after them) but armed with captured German weapons and a comprehensive understanding of tubochargers. Just as a line can be drawn from troop drawdowns to political violence, there's a distinct correlations between GIs returning home and the violence with which Ford Flathead V8s were torn apart by inventive supercharging methods paired with landspeed record attempts.

Give a man a racecar and he'll crash it on the salt flats in a day. Teach a man to repair a racecar and it will sit in the garage of his suburban house for a few years in between complete engine rebuilds required by what can only be described as "vaporized piston rods."

Of course this hotrodder generation created the circumstances we live in today, as the market saw their fast cars cobbled together from old prewar hulks and simply stamped out new ones from factory, faster and more convenient for the next generation than building one from scratch. Now the project manager mother of 3 drives a 4wd barge with climate controlled seats boasting more computing power than the moon mission and an emissions-controlled powertrain with more horsepower than her grandfather's jalopy and her fathers factory muscle car combined. And she doesn't care at all.

Yet Amongst the average civilians there walks a rare breed: people who know how to change their own oil. We the chosen move among you silently, bucking the system, operating outside the cultural helplessness and trading in forbidden knowledge in almost-abandoned forum threads (flame wars over conventional vs synthetic).

While we do have a marked air of superiority about this, I can't say I haven't stooped to imitating the rich myself. I've been known to wear a silly jacket from time to time.

[sustainabilitythoughts]

100 solutions to global warming

This TED talk from 2018 discusses the research and conclusions from Project Drawdown.  Drawdown is when concentrations of CO2 in the atmosphere begin to decline on a year-to-year basis. The Project Drawdown organization has been evaluating a variety of solutions for both reducing CO2 emissions and removing CO2 from the atmosphere.  100 solutions are described in the book that summarizes their research and evaluation.  You really need to watch the video to get a good understanding of their work, but here are a few highlighted quotes from the video. 

“We would want to implement these solutions whether or not global warming was even a problem, because they have cascading benefits to human and planetary well-being.” “When we implement these solutions, we shift the way we do business from a system that is inherently exploitative and extractive to a new normal that is by nature restorative and regenerative. We need to rethink our global goals, to move beyond sustainability towards regeneration, and along the way reverse global warming.”

“What surprised us, honestly, was that eight of the top 20 relate to the food system. The climate impact of food may come as a surprise to many people, but what these results show is that the decisions we make every day about the food we produce, purchase and consume are perhaps the most important contributions every individual can make to reversing global warming.”

“A plant-rich diet is not a vegan or a vegetarian diet, though I applaud any who make those choices.  It's a healthy diet in terms of how much we consume, and particularly how much meat is consumed. Moreover, approximately a third of all food produced is not eaten, and wasted food emits an astounding eight percent of global greenhouse gases.”

“The single most impactful solution, according to this analysis, would be refrigeration management, or properly managing and disposing of hydrofluorocarbons, also known as HFCs, which are used by refrigerators and air conditioners to cool the air.”

“Rooftop solar comes in ranked number 10.”

[starseedfxofficial]

Cracking the Code: How to Master CCI Grid Trading Like a Pro The Untapped Power of CCI in Grid Trading If you think CCI is just another indicator collecting digital dust on your trading platform, think again. When combined with grid trading, it transforms into a high-powered strategy that lets you navigate the market like a seasoned pro. But let’s be real—most traders misuse it, treating it like an unreliable GPS that keeps recalculating routes at the worst possible moment. Grid trading is often dismissed as reckless or outdated, but when paired with the Commodity Channel Index (CCI), it becomes a methodical, high-probability trading system. The trick is knowing how to fine-tune the grid to CCI’s overbought and oversold signals while avoiding the trap of blindly stacking trades. In this article, we’ll crack the CCI grid trading code—unveiling a hidden formula, little-known secrets, and battle-tested strategies that give you an unfair edge over retail traders. Why Most Traders Get It Wrong (And How You Can Avoid It) The usual story goes like this: A trader sets up a grid, loads up buy and sell orders, then prays that market volatility doesn’t wipe them out. Sound familiar? Here’s where the Commodity Channel Index (CCI) changes the game. Most traders make two fatal errors with grid trading: - No confirmation: They stack orders like a Jenga tower without using an indicator for precision. - Bad timing: They fail to identify the best market conditions, treating every price level equally. By integrating CCI, you can filter out bad trades and only execute orders when momentum aligns with grid levels—a strategy that can mean the difference between compounding profits and blowing your account. The CCI Grid Trading Blueprint 1. Understand CCI’s Hidden Strengths Most traders only use CCI for overbought/oversold signals, but that’s like owning a Ferrari and never driving above 40 mph. Here’s what CCI can really do: - Divergence Detection: Spot hidden momentum shifts before price reverses. - Breakout Confirmation: Verify whether price is truly breaking out or faking out. - Trend Acceleration: Identify when a trend is gaining momentum before the herd catches on. 2. Set Up a Smart Grid (Not a Death Trap) A typical grid strategy involves placing buy and sell orders at fixed intervals. But a smart CCI-based grid adapts to market conditions. Here’s how: - Use ATR (Average True Range) to set grid spacing based on volatility. - Execute only when CCI confirms momentum in your favor. - Avoid placing trades in a ranging market where price stagnates. 3. The Sweet Spot: Combining CCI with Grid Trading Entry Rules Here’s the elite setup to make your CCI grid trading bulletproof: - Entry Criteria: Place buy trades only when CCI is below -100 and reversing upward. Place sell trades only when CCI is above +100 and turning down. - Exit Strategy: Close partial profits as price moves into the mid-range of CCI (between -50 and +50). - Risk Management: Use dynamic lot sizing—larger positions for high-confidence setups and smaller ones when conditions are uncertain. Case Study: The Grid Trading Experiment That Shocked the Pros A backtested study on GBP/AUD revealed that a CCI-filtered grid strategy outperformed traditional grid trading by 37% in trending markets. The secret? Eliminating weak entries using CCI as a momentum filter. By using a dynamic grid structure based on CCI confirmation, the test showed that traders could avoid unnecessary drawdowns while maximizing winning streaks. Final Thoughts: Why CCI Grid Trading is Your Edge Mastering CCI grid trading is about precision, patience, and knowing when to strike. The real key isn’t just setting up a grid—it’s filtering when to execute using CCI. Done right, this strategy turns market volatility into your personal ATM. Want to take your trading to the next level? Check out these free resources: - Stay ahead of the market with real-time Forex news: StarseedFX Forex News - Master advanced strategies with expert education: StarseedFX Free Forex Courses - Get insider insights and join a pro trader community: StarseedFX Community - Optimize risk with a free trading plan: Free Trading Plan - Enhance performance with a free trading journal: Trading Journal - Upgrade your execution with a smart trading tool: Smart Trading Tool   —————– Image Credits: Cover image at the top is AI-generated Read the full article

[mortgagechoicebundaberg]

Secure the Best Loan Solutions with Expert Commercial Loan Brokers

Finding the right monetary aid on your personal and enterprise needs can be hard. Whether you are planning to shop for a home, refinance a automobile, or spend money on business belongings, expert agents can simplify the process and help you steady the satisfactory offers. Working with experienced Commercial Loan Brokers guarantees you access tailor-made mortgage options perfect for your precise necessities.

Why Mortgage Pre Approvals Matter

Getting Mortgage Pre Approvals is an crucial first step while shopping assets. It offers you a clean knowledge of the way a great deal you can borrow and strengthens your function when negotiating with sellers. Pre-approval shows you’re a severe customer, making your gives more attractive in competitive markets.

Benefits of Car Loan Refinancing

If you’re struggling with high vehicle mortgage payments, Car Loan Refinancing offers a practical answer. By refinancing, you could steady lower interest fees, reduce your month-to-month payments, and store money over the lifestyles of your mortgage. It’s a clever monetary pass for the ones seeking to ease their finances and manipulate debt more efficiently.

How a Car Refinance Loan Works

A Car Refinance Loan allows you to replace your existing automobile loan with a new one at higher terms. Whether you need decrease hobby quotes, extended repayment durations, or reduced month-to-month fees, refinancing can help. It’s perfect for anybody looking for economic flexibility and lengthy-time period financial savings.

Choose the Right Business Mortgage Broker

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Exploring Business Commercial Loan Options

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Construction Loans Australia: Build with Confidence

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[wealthview]

Let’s talk about something that can sound a bit intimidating but is actually quite straightforward: account forex managed. Are you tired of spending hours glued to charts, agonizing over every pip movement, and still not seeing the consistent profits you crave in the forex market? Do you wish you had the expertise of seasoned traders working for you, maximizing your potential returns? Then you’re in the right place. This post will demystify managed forex accounts, exploring everything from choosing the right manager to understanding the risks involved. We’ll cover all the essential aspects, ensuring you feel confident and informed before taking the leap. Get ready to learn how a managed forex account could potentially transform your trading experience.

Understanding Managed Forex Accounts

A managed forex account, simply put, is a trading account where a professional forex trader manages your money on your behalf. You, the investor, provide the capital, and the manager, often a firm or individual with proven expertise, handles all the trading decisions. This differs significantly from self-directed trading, where you’re solely responsible for your trades.

What are the benefits?

Expertise: You gain access to the knowledge and experience of seasoned professionals.

Time Savings: You free up your time, eliminating the need for constant market monitoring.

Potential for Higher Returns: Skilled managers can potentially generate higher returns than you might achieve independently.

Reduced Stress: Let someone else handle the emotional rollercoaster of trading.

What are the drawbacks?

Loss of Control: You relinquish direct control over your trading decisions.

Fees and Commissions: Managed accounts typically involve fees and commissions.

Risk of Fraud: It’s crucial to choose a reputable manager to avoid scams.

Performance Variability: Past performance doesn’t guarantee future success.

Choosing the Right Managed Forex Account Provider

Selecting the right managed forex account provider is paramount. A poor choice can lead to significant losses. Therefore, thorough due diligence is essential.

Due Diligence: Key Factors to Consider

Track Record: Scrutinize the manager’s historical performance. Look for consistent profitability over an extended period. Don’t just focus on peak returns; examine drawdowns (periods of losses) as well.

Trading Strategy: Understand the manager’s trading approach. Is it based on fundamental analysis, technical analysis, or a combination? A clear, well-defined strategy is a positive sign.

Transparency: A reputable manager will be transparent about their fees, performance, and risk management strategies. Avoid providers who are secretive or evasive.

Regulation and Licensing: Ensure the manager is regulated by a reputable financial authority. This provides a layer of protection for your investment. Check for licenses and registrations.

Client Testimonials and Reviews: Read reviews and testimonials from other clients. Look for patterns and recurring themes in the feedback. Be wary of overwhelmingly positive reviews, as they may be fabricated.

Types of Managed Forex Accounts

Managed forex accounts come in various forms. Understanding these differences is crucial for making an informed decision.

Discretionary Accounts: The manager has complete control over your trading decisions.

Non-Discretionary Accounts: The manager provides recommendations, but you retain the final say on trades.

Fund Management: Investing in a larger forex fund managed by professionals. This often requires a higher minimum investment.

Understanding the Risks Involved

While managed forex accounts offer the potential for higher returns, it’s crucial to acknowledge the inherent risks.

Risk Management Strategies

Diversification: A well-diversified portfolio can help mitigate risk.

Stop-Loss Orders: These orders automatically close a trade when it reaches a predetermined loss level.

Position Sizing: This involves carefully determining the appropriate amount to invest in each trade.

Risk Tolerance: Understand your own risk tolerance before investing.

Potential Risks

Market Volatility: The forex market is inherently volatile, and losses are always possible.

Manager Performance: Even experienced managers can experience periods of underperformance.

Fraud and Mismanagement: There’s always a risk of encountering fraudulent or incompetent managers.

Lack of Liquidity: In some cases, it may be difficult to withdraw your funds quickly.

Legal and Regulatory Considerations

Before investing in a managed forex account, it’s essential to understand the legal and regulatory framework governing such accounts.

Regulatory Bodies

Different countries have different regulatory bodies overseeing forex trading. It’s crucial to ensure your chosen manager is regulated by a reputable authority. For example, in the US, the Commodity Futures Trading Commission (CFTC) plays a significant role. Learn more about CFTC regulations here. (This is a placeholder; replace with a relevant link).

Contractual Agreements

Carefully review all contractual agreements before investing. Understand the terms and conditions, including fees, performance metrics, and dispute resolution mechanisms.

Monitoring Your Managed Forex Account

Even though you’re entrusting your money to a professional, regular monitoring is still essential.

Key Performance Indicators (KPIs)

Return on Investment (ROI): Tracks the profitability of your investment.

Sharpe Ratio: Measures risk-adjusted returns.

Maximum Drawdown: Indicates the largest percentage loss experienced during a specific period.

Win Rate: The percentage of winning trades.

Communication with Your Manager

Maintain open communication with your manager. Regularly request performance reports and ask questions about their trading strategies.

Summary

Managed forex accounts offer a potential pathway to consistent profits in the forex market, but they are not without risk. Choosing the right manager, understanding the risks involved, and conducting thorough due diligence are crucial for success. Remember to carefully review all contractual agreements, monitor your account regularly, and maintain open communication with your manager. By following these steps, you can significantly increase your chances of a positive outcome.

Let’s discuss! What are your thoughts on managed forex accounts? Have you had any experiences (positive or negative) that you’d like to share? Please leave a comment below and let’s start a conversation. And don’t forget to share this post with anyone who might find it helpful!

[maanvinay]

How a Retirement Calculator Helps You Balance Between Savings and Investments

When planning for retirement, you must manage your savings and investments wisely. Many overlook the importance of balancing these two aspects, which can lead to financial insecurity later. By assessing your financial situation and future objectives, you can see how to allocate your resources. 

A retirement calculator helps you visualise different scenarios and find the right balance, ensuring you are well-prepared for the future. To know more about retirement calculators read on to:

Understanding Retirement Calculators

A retirement calculator is a useful online tool that helps estimate the total retirement savings you need to generate by your envisioned retirement age to sustain your desired income levels after that.

It requires critical personal inputs:

Current age

Target retirement age

Monthly income needed in retirement

Existing retirement savings

Expected annual investment returns

The calculator uses the principles of the time value of money, considers average inflation, and estimates savings growth through compounding returns to determine the future retirement corpus required.

Considering your current retirement savings, monthly contributions, risk tolerance, income needs, and life expectancy gives you a personalised estimate of the total nest egg you should aim to accumulate. This approach helps you set realistic goals and develop effective saving and investment strategies tailored to your situation.

Balancing Savings and Investments

Achieving the right balance between savings and investments is essential for successful retirement planning.

1. Determining Optimal Savings Rate

The retirement calculator recommends the optimal monthly or annual savings amount to be regularly invested to reach your retirement corpus goal.

This is calculated after accounting for essential living expenses, financial obligations, and discretionary spending. It’s also wise to create adequate buffers for unexpected expenses.

2. Strategic Asset Allocation

The calculator determines an appropriate distribution across various assets, such as equity mutual funds, fixed deposits, gold, etc., mapped to investor risk tolerance. 

Historical category returns data enable optimising allocation for balancing capital stability and long-term appreciation potential.

3. Incorporating Risk Appetite

The portion of a portfolio dedicated to higher-risk, higher-return assets like equities depends on an individual’s comfort level with potential short-term volatility and drawdowns.

Conservative investors might restrict their equity exposure to around 30%, while those with a moderate risk appetite may allocate up to 60%.

4. Adjusting Investment Horizon

The savings-investments mix should also evolve to align with the current and target retirement age. 

As the investment horizon shortens closer to retirement, tools suggest gradually allocating more to fixed-income assets to protect accumulated capital.

Benefits of Using a Retirement Calculator

Using a retirement calculator can significantly enhance your financial planning process. Some of the benefits are listed below:

1. Goal Setting

A retirement calculator enables you to establish achievable retirement goals reflecting your current financial status and aspirations. By entering your desired retirement lifestyle and income, the calculator can provide a clear target, helping you visualise what you need to achieve.

2. Gap Analysis

One key feature of a retirement calculator is its capability to perform a gap analysis. This analysis highlights any shortfall between current savings and projected retirement needs. 

This awareness lets you adjust your savings strategies or investment approaches to ensure you’re on track.

3. Scenario Planning

Retirement calculators allow for scenario planning and exploring various retirement situations. 

For instance, you can simulate the impacts of early retirement, rising living expenses, or market fluctuations. Understanding these scenarios equips you to face challenges and fine-tune your retirement strategy.

4. Investment Strategy

These calculators offer valuable insights into the ideal investment mix customised to align with your goals and risk tolerance.

By modelling different asset allocations, you can see how adjusting your investments impacts your overall retirement savings, enabling you to make informed decisions.

5. Savings Discipline

Using a retirement calculator encourages consistent saving habits. 

By setting clear targets for monthly contributions, the calculator motivates you to stick to your savings plan and helps you stay focused on your long-term goals.

6. Flexibility and Adjustability

Retirement calculators are not one-time tools; they are flexible and can be adjusted as your circumstances change. 

Regularly updating the calculator with new financial information helps refine your strategy and align with your changing goals.

Tips for Effective Use of a Retirement Calculator

To maximise the benefits of a retirement calculator, consider the following tips: consider these tips:

Accuracy of Inputs: The accuracy of all data provided—such as current assets, expected income, realistic return expectations, and retirement timeline assumptions—is essential for the calculator to produce reliable savings and corpus estimates. Even small errors can significantly affect the projections.

Regular Review: Given the long duration of retirement planning, investors should use the calculator annually to revise key variables like amended savings, returns assumptions, and changing expenses. This ensures that your strategies remain relevant.

Seek Expert Advice: While calculators are self-explanatory, investors should seek professional guidance from qualified advisors to validate assumptions, especially in complex scenarios like early retirement.

Conclusion

A retirement calculator is a crucial resource for finding the optimal balance between savings and investments. 

These calculators empower you to make informed decisions about your financial future by assisting you in setting achievable goals, pinpointing gaps in your savings, and examining different scenarios. 

Balancing savings and investments is essential for achieving your retirement goals, and utilising a retirement calculator can significantly enhance your financial planning journey.

[christianlanden]

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.

[lindaboggers]

 How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.

[georgeschuylerfinance]

 How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.

[starseedfxofficial]

PMI & Maximum Drawdown: Hidden Forex Strategies You Need to Know The PMI & Maximum Drawdown Secret Sauce: How to Use These Hidden Gems to Outwit the Market You know those hidden gems you stumble upon while digging through a treasure chest—maybe it’s that forgotten vintage watch or the weirdly rare vinyl record that no one else knows is valuable? Well, in Forex trading, two similar treasures exist: PMI (Purchasing Managers Index) and Maximum Drawdown. And trust me, they're not just for the overachievers—these are your secret weapons that could turn your trades into a powerhouse of profitable decisions. But here's the kicker: most traders miss these! So let's take a deeper dive into how these hidden indicators can completely change your game. What is PMI, Anyway? The Market’s “Mood Ring” Alright, let’s break it down. The Purchasing Managers Index (PMI) isn’t just some random statistic your economics professor babbles about—it’s a pulse-check for an economy. Think of it as a market's "mood ring." It measures whether the economy is expanding, contracting, or cruising at a steady pace. When PMI hits above 50, it’s like the economy’s giving you a high-five; below 50, and it’s more like a slap in the face. Why does this matter in Forex? Because currency values are heavily influenced by economic growth. A high PMI means that businesses are spending, people are employed, and there’s confidence—everything that builds a strong currency. Now, imagine if you could time your trades to coincide with those mood shifts. It’s not magic; it’s just understanding how the market ticks, and PMI is your ticket to this backstage pass. How PMI Connects to Maximum Drawdown If you’ve been in the Forex world for more than five minutes, you’ve heard the term maximum drawdown. And you probably know it’s a nasty thing—it's the measure of your largest loss from a peak to a trough during a given time period. Basically, it's the uh-oh moment in a trade when things go south. So, what does this have to do with PMI? More than you think. Here's the magic: When PMI reports show an economy weakening (say, it drops below 50), the currency often weakens too, resulting in a higher maximum drawdown for traders who don’t anticipate the shift. Conversely, when PMI is strong, the economy is growing, and the maximum drawdown tends to shrink—your trades become less volatile and more predictable. In short, understanding PMI allows you to align your risk management (maximum drawdown) with the economic landscape, keeping your strategy more aligned with market realities. The Hidden Pattern: Timing Your Entry with PMI and Managing Risk with Maximum Drawdown Here’s the ninja tactic: Use PMI readings to gauge the overall health of the market and set your maximum drawdown limits accordingly. For instance: If PMI reports show a sudden spike above 55, it might be time to enter bullish trades—but adjust your drawdown levels tighter, as the market is likely to swing less violently. On the flip side, if PMI is plunging below 45, it’s a red flag. Set your maximum drawdown levels wide—because market volatility could cause bigger moves, and you don’t want to be caught in a downturn with a tight risk window. Unheard-of Tactic: The "PMI Drawdown" Combo Strategy Let’s talk about combining the power of PMI with drawdown management in a way that no one is teaching. Most traders just use PMI as a standalone metric, but let’s think about this combination: Identify PMI Trend: Check if PMI is trending upwards or downwards. The direction of the trend should dictate your overall market outlook (e.g., if PMI is trending upwards, the economy is likely to keep expanding, so set up your trades to catch that momentum). Maximum Drawdown Analysis: Look at your current trade history and calculate your max drawdown. If your system is experiencing a drawdown of 5-10%, start analyzing your trades more cautiously. Adjust Your Entry and Exit: Depending on PMI readings, tighten or loosen your maximum drawdown limits. For example, if PMI has been above 55 for several months, but you're in a drawdown, consider tightening your exit strategy and focusing on smaller, more reliable trades rather than going for big wins. This combination of PMI and drawdown management isn’t talked about enough, but it’s game-changing. It’s like knowing where the storm clouds are and knowing just how far you can travel before they hit. The Case Study: How PMI Saved One Trader from a Major Drawdown Let’s look at a real-world example. In 2023, a trader named Tom was watching the USD/JPY pair. He noticed that PMI had been rising steadily in the U.S., indicating a healthy economy. Tom, having a strict maximum drawdown strategy of 10%, decided to risk only 2% of his portfolio on a long position in USD/JPY. By the time the PMI data came out showing an even stronger-than-expected number, the USD surged, and Tom’s trade soared. His maximum drawdown remained at just 1.5%, which was a huge win considering the volatility at the time. Had he not understood the PMI signal, Tom might have been caught in a drawdown of over 10%—which could have wiped out his trading account. Maximum Drawdown: The Silent Killer of Traders Let’s switch gears and talk about maximum drawdown in isolation. Why is it so deadly? Imagine you’re hiking through the mountains (bear with me). You’ve got your gear, your map, and you’re feeling confident. But suddenly, the ground beneath you gives way, and you fall 50 feet down into a ravine. Now, you’re hurt, disoriented, and you have to climb your way back up. This is maximum drawdown in the market. It’s the deep fall that can set you back for months, emotionally and financially. Knowing how to manage it can mean the difference between being recovered and staying stuck. Here’s the secret: successful traders don’t just focus on profits; they focus on managing their losses, keeping their drawdowns in check, and using tools like PMI to stay ahead of the market’s twists and turns. Takeaways: Your Key to Unlocking More Profits and Less Risk Alright, let's wrap this up and get to the good stuff: what you can do with this newfound knowledge: Use PMI as a trend signal: Whether bullish or bearish, PMI readings can set the tone for your trades. Combine PMI with drawdown management: Adjust your max drawdown thresholds based on PMI reports. Don’t let volatility catch you off guard! Stay ahead with early warnings: PMI can serve as a canary in the coal mine for risk—use it to tighten your risk management strategies before the market gets wild. Backtest and tweak your strategy: The combination of PMI and drawdown management isn’t one-size-fits-all—test it out, adapt it, and see what works best for your trading style.   —————– Image Credits: Cover image at the top is AI-generated Read the full article

[saltygardenerlove]

 How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.

[bertrhert]

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.

[craigmyersfinance]

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

How These Hedge Funds Posted Consistent Returns in the Riskiest Markets

Six of the top 50 most consistently performing global hedge funds invest in volatile emerging markets. It’s a surprising finding from Global Investment Report’s 21st annual survey over the last five years through 2023.

The six funds posted average returns of more than 12.5 percent during that period, according to the report. Four of the six were credit funds.

Emerging markets were especially vulnerable when the Fed pushed up interest rates in 2022. BarclayHedge EM Global Equities Hedge Fund Index lost 17 percent in U.S. dollar terms that year, double the 8.2 percent loss of the average hedge fund across all strategies. But the six EM funds in the Top 50 survey rallied by more than 2 percent in 2022.

These funds’ consistency was also evident in the years before and after rates soared. In 2019, 2020, and 2021, the average return of the six funds was 14.2 percent, 14.9 percent, and 16 percent, respectively. Then in 2023 they rallied an average of 16.6 percent. And through the first half of 2024, EM was the top-performing strategy, up more than 9.5 percent.

(In a webinar on October 15, the author led a discussion with EM managers including Wellington Management, Cheyne Capital, and Sandglass Capital on how they generated consistent returns.

Funds sustained their returns by sidestepping drawdowns. This was accomplished in a number of ways, according to interviews with several of the managers.

Managers said one key driver in debt is the relatively small percent of dedicated funds versus total assets.

EM-dedicated credit hedge funds control about $10 billion out of $3 trillion of existing debt, said Waha EM Credit manager Mohamed El Jamel. Multistrategy funds may trade another $10 or $20 billion.

Accordingly, he sees “more alpha potential in EM credit than in developed markets, which enjoy higher levels of research, far more liquidity, tighter spreads, less dislocation, and lower volatility.”

The second driver is a tight focus on risk management. Because emerging markets are volatile, El Jamal imposes strict position and industry exposure limits and maintains significant diversification that’s informed by historical correlations.

This has kept consecutive monthly drawdowns to just two months. The $700 million fund that’s based in Abu Dhabi, and which is number 37 on the list, has had only one down calendar year in 2014 when Waha lost 40 basis points. Over the 12 years since its launch, according to BarclayHedge, the fund has generated dollar-based annualized returns of 9.7 percent, volatility of 4.5, and trailing 5-year market correlation of 0.23 through 2023. Through the first half of 2024, it’s up more than 10 percent.

Promeritum, a $400 million London-based EM credit fund, said steady performance can be attributed to on-the-ground research. The fund has not had a down year since its launch in January 2015.

Co-managers Pavel Mamai and Anton Zavyalov credited this in part to their extensive network of local personal relationships in each emerging market in which the fund invests. This support helps identify opportunities and risks.

Published data, he said, can only take one so far in discerning trends across local politics, foreign exchange policy, business support and taxation, regulation, and litigation. “Local contacts, explained Mamai, “can help decipher what’s motivating the actions of governments and state-owned companies and then match that against what actually transpires.”

The network also promotes better understanding of what’s driving IMF and World Bank decision-making, whose statements and actions can directly affect a fund’s performance.

The 44th-ranked fund generated average annual returns of 8.4 percent through 2023, with an annual standard deviation that was a smidge over 4, and correlation to the S&P 500 of 0.18 over the past five years. Promeritum is on pace to generate comparable returns this year.

Managers said another driver of consistent performance was a well-honed macro sense. Commodity prices, interest rates, and global shipping prices and availability are significant drivers of the economic health of emerging markets—which are determined by factors well beyond their borders. During the pandemic when ports were backed-up, for example, emerging markets suffered when their products couldn’t reach the U.S.

Geopolitical conflicts, also out of their control, take a big toll on these markets. Russia’s invasion of Ukraine triggered food shortages across Africa. The wars in the Middle East increased global oil prices and added uncertainty to elections around the world.

War has a tragic human toll and puts investor capital at risk. Most PMs who owned Russian assets wrote down the entire value of their investments not long after the invasion of Ukraine began in 2022.

The rapid normalization of macro and economic policy and improving relationships with external creditors across a range of distressed sovereigns and corporate issues are driving credit opportunities across much of the market right now, explained Genna Lozovsky co-founder and CIO of Sandglass Capital.

The 33rd-ranked Sandglass, which is based in London, is a special situations fund that focuses on credit. The fund is up 24 percent through the first two-thirds of 2024. That’s triple the $400 million fund’s annualized returns since its inception more than a decade ago. Maintaining a bit of equity exposure, Sandglass’ volatility runs higher than some other EM credit funds (10.7) as does its market correlation, which stood at 0.57 at the end of 2023.

Asset managers and banks have a positive outlook for the space. J.P. Morgan wrote in August that “earnings growth for EM in 2024 and 2025 is nearly 17 percent and 15 percent respectively, compared to less than 11 percent and 14 percent in the United States.” The bank said valuation spreads between developed markets and EM are more than 30 percent compared to a historical average of 24 percent.

Lazard Asset Management believes this gap, “may narrow” because of stronger earnings growth and other attractive metrics in emerging markets. But it cautions that despite China’s new robust economic policy announcement, the country’s slowing growth could still weigh on these markets.

Given Sandglass’ outperformance this year, Lozovsky has been harvesting profits and reinvesting in new opportunities, which he said may not appreciate as rapidly as some previous positions.

“We’re seeing improving macro conditions across a range of emerging and frontier markets as interest rates continue to fall which is supporting growth,” says Lozovsky, “Accordingly, increased investor sentiment has reduced the spreads in distressed opportunities.” And while he believes the investment impact of two major wars have so far been manageable, he acknowledges that can change.