I read a lot of investment blogs, but don’t necessarily expect you to do the same. So I will occasionally select the most interesting stuff published out there and give you short remarks and links. If you are a blogger too, let me know when you publish something that can be related to aggressive investing.

• Saving is one of the ways to obtain money for investing. The Clever Dude is proposing 3 ways to do it – first, second, third.
• Elle wonders if the technology is pushing us further into debt. And debt and investing rare go hand in hand (unless done the right way)
• I still haven’t published anything about real estate investing (coming soon), but you can check why Fiscal Musings likes real estate – part I and part II
• Pinyo is giving 50 Frugal Tips, Ideas, and Resources
• Not everyone is worried about the US mortgage crisis. For example the blogger of My Two Dollars feels ok about it.
• The simple dollar has an excellent post – Emotional Fulfillment and Financial Success

That’s it for me today. Hope I am giving you some useful reading. Again, if you feel something worthy is missing, use the comment to suggest it.

This young investment opportunity is offered by Crescent Bay Capital Management. At the time of writing this their site was not accessible, but you can obtain investment documents thru introducing brokers such like Altavra.

They have a couple of investment opportunities, but my attention was grabbed by the latest one, the Premium Stock Index Program. This is an Index Option Trading investment with $10,000 minimum account size.

The offer was launched in August 2007 and since then the ROI is around 35% profit. This makes average 7% monthly.

As with every young opportunity you don’t have enough historical data to judge how sustainable the ROI is. This qualifies the opportunity as extremely risky and with a very good profit potential. Exactly a shark’s deal.

This is Part Three from the tutorial How To Trade Forex By Signals. In Part One we discussed how to choose a forex broker and trading signals provider. Part Two tried to push you into action and to help you develop your own strategy.
Now in this last part I want to give you some tips on better performance.

Photo by david.nikonvscanon at Flickr

Tips To Improve Your Performance

The quality of the signals you are subscribed for is very important factor for your performance, but it’s not the only factor. You and your actions have at least as much influence as the signals themselves. Here are some ideas how to get more from the signals you are subscribed to:

• Invest large amount. Unlike the managed account, the forex signal services cost fixed price for a given period. So obviously the more money you have to trade, the less percentage of your profits will go to pay for the signals. Trading by signals makes no sense if you want to trade only $250 – even if your fee is just $50 per month, it’s unlikely that you will make enough to cover it and make profits. On the other hand, if you have $50,000 in account and achieve 5% monthly ROI, the fee of $250 is just 10% of your profit – much better than you would pay in a managed account.
• Get longer subscription. Most trading signal providers will give you nice discounts for longer subscription. For example TradeWindowFX gives $50 discount if you pay quarterly and Millennium Traders discounts 50% if you pay annually. So once you get comfortable and confident with your signals provider, see if you can get a discount and subscribe annually.
• Use sounds. Many investors don’t want to trade by signals because it sounds like too much staying on the PC. If your signals provider has sound alerts, you won’t need to care about that. You can watch TV, cook, eat or do anything you want to as long as you are around the PC to react fast. If your job or business is related to staying on the PC anyway, trading by signals is perfect way to earn extra income without interrupting your normal lifestyle.

Trading forex by signals is more involved than opening a managed forex account, but you have full control over your funds and over each trade. Instead of giving thousands to a careless trader and hoping they will be responsible enough, you’d better subscribe for a good signals service and trade without being an expert.

I don’t remember where exactly I found Milbay Finance, but I think some of this blog readers were also considering it. Milbay Finance is Urugway based company which offers forex trading thru North Finance and also passive investment schemes. As usual I’ll bother you with the latter offers only:

Managed Forex Accounts

Their minimum is only $5,000, the performance fee is 33% and if you wish to open an account, you need to do it with MT4 platform based broker firm.

The performance is not earth shattering, but good and stable – 45% for 2007. Given how dramatically the more aggressive managed account services can lose your money in hours, this is a very attractive opportunity in my opinion.

Pooled Forex Fund

If $5,000 is too much for you, you can join their pooled funds whose minimum is just $1,000. The pooled funds are traded in the same way, but the performance fee is 25% only. Sounds great, but you don’t have the same control over your money like in a managed account.

I would never (never again, as I have done it in the past) invest serious money in a pooled fund managed by some strangers, but that’s just me. (Don’t know why? Check out the Scams section on HYWD, it has plenty of horror stories about such “investing”).

So ignoring the pool option, I am considering their managed account service. Right now GalleonFX and FX Street performance is so poor, so we really need something new.

And as usual, I am open to your suggestions via comments.

In How To Trade Forex By Signals – Part One I wrote about choosing a trading signals provider (My personal choice is Millennium Traders) and a forex broker if you don’t have any yet.

Selection is important, but if you want to achieve results, you must actually start trading. Here comes part Two.

Let’s Rock… Start Action!

Once you’ve made your mind about the signal service and the broker/trading platform you are going to use, it’s time to take action. Follow the steps below to reduce the risks and improve your performance.

1. Open account and deposit funds to your forex broker. It’s time to do this. Depositing real money will set your mind in the right mood and you will be ready for the shark’s game.

2. Start a trial of the signal service. Yes, do the trial with real money and not with a demo account. You may play with small lots (so only few dollars will be risked on your balance per trade), but do it with real money. You need to see how your mind handles the signals when real funds are in the game. Most trials are short (one week), so you can’t rely too much on this test performance, but it’s still a good way to experience how the signals reflect your trading.

3. Pay for the signal service. If you felt the signal provider is giving good calls, even if your first week trial is not a success, it’s the time to pay the subscription and start the real fun. The fee paid to the signal provider may be one of the best investments you ever made.

Develop your strategy

This doesn’t mean that you should understand trading well (otherwise why would you pay for signals). Developing a strategy for signal trading is simple – it means just to set your risk levels. The best signal providers won’t send you alerts “close right now”, “close at 15 pips profit” etc.

For example in Millennium Traders we are given signals like “consider taking some profits on XXX/YYY”, but the chat room moderator keeps the position open. They usually have 3 targets and if the signal is good give you 3 suggestions to close or to keep waiting for higher profits. You should decide this yourself. Of course you can decide to follow exactly the moderator’s sells/buys, but this again means you have chosen such a strategy (Millennium Traders mods are quite aggressive. I usually close positions before them).

Question: Do you already have any experience with forex signal trading?

The last part is now available – How To Trade Forex By Signals, Part Three

But yes, the trading results are very volatile.

People constantly come to this blog searching for words and phrases like the ones on the screenshot below:

So I wanted to post this bit and make it clear that GalleonFX managed forex account is not a scam. The results posted on their sites are real and I am able to verify this because I have an active account with them.

However…

The trading is really very voilatile. At the end of 2007 my account was up with 44% for about six months.

Now, at Jan 12th, the draw down for two weeks is close to 40% and my account is in about 10% loss.

I know the things will most probably improve to the end of the month, but anyway you should have healthy nerves if you want to invest in GalleonFX.

I plan to change my strategy with them. I’ll add more funds at the lower times and withdraw 50% of the profits in each profitable month. Because with such volatile results investing the minimum and hoping to compound doesn’t make much sense. Later I’ll write more about this non-compounding strategy and why it is good with some high risk investments.

In case you are totally new to the signal trading, I strongly encourage you to read this introductory article – How To Profit With Forex Or Stock Trading Signals. It is a good starting point for understanding the basics concept.

So Why Trade Forex By Signals? Can’t You Just Trade Yourself?

Why go to doctor when being sick? Can’t you just cure yourself?

Unless you are a doctor too, I don’t recommend you experimenting with your health. In same way, I don’t recommend you experimenting with your money unless you are a professional forex trader.

Essentially you would use (and pay for!) forex trading signals for the same reason that you would pay your financial adviser – to receive professional advice which leads to much better results than you can achieve yourself.

When it comes to health and money the professional advice can not only bring better results but is likely to save you from a disaster.

How To Choose Forex Trading Signals Provider?

This question have been discussed before on The Shark Investor. There is one selected signal provider in my portfolio, but you should always be able to pick a provider yourself. Watch for the following criteria:

• Past results. Yes, past performance is not a guarantee for future profits, but it still remains the most important factor for choosing a forex signals provider. Do not expect to achieve exactly the same results as the signal provider! There are many factors which reflect your performance as you’ll see later in this tutorial.
• Type of signals. Usually the forex trading signals are distributed by email, chat rooms or desktop software. Email based signals are not very good for day traders because of the time delays. I personally prefer chatrooms, because you not only get signals, but can talk with the trader and other traders (don’t overdo it though).
• Subscription price. Like everything good, the forex signals are not free. The prices vary usually between $50 and $300 monthly, often with discounts for longer subscription. Of course lower price sounds better, but what’s the point if this means lower quality (i.e. performance)? You should compare price with the results and do your math – so your profits are higher than the subscription fee.
• Customer support. Like with every subscription service, I suggest you ask few questions to the support and see how quick and professionally they reply. The best companies have live support and phones.
• Reputation. The longer the company is in business, the better. If they report fake signals, you can easy verify this browsing the net and searching for reviews about the provider. Easier option to find a trusted signal provider is just to check the reviews and picks here, on The Shark Investor.
• Refund policy. A company which knows the quality of its own service is not afraid to offer a money back guarantee. Additionally, this is a good insurance for you in case you are not happy with the results.

Here is how a trading chat room looks (from Millennium Traders)

I am doing a lot of research on this blog to find good signal providers, so you can save the effort searching yourself. But it’s still better to know how to research when you need to do it.

How To Choose a Forex Broker For Your Signal Trading

This time, if you want to know more I’ll send you to an external resource – The Forex Trader has a good tutorial on this topic. If you don’t have much time to read the entire tutorial there, here is a quick summary of the most important criteria (some are from that website, others are mine):

• Tiny spread
• Minimum amount to open a trading account
• Payment methods
• Customer support
• Any other fees
• Quality of the software
• Charts etc. extras

Many traders claim that choosing the broker is vitally important. In my opinion as long as you don’t choose some cheap garage-made scam company, the other factors in your trading matter more.

The only important step you must take at this point is to open a trial account with the company and play a little with the platform. Make sure that you feel comfortable with the software, that it doesn’t crash often and reacts quick enough.

Do not submit for trial after you pay for the signals. You will NOT be able to test the signals performance, because trading on demo is very different than trading real money. All you need to achieve with the trial is to see how comfortable you are with the trading platform. Don’t lose paid signal subscription days to play demo accounts.

Continue reading – How To Trade Forex By Signals, Part Two

I am usually looking for lower entry managed forex accounts, but because of this I am missing some quite good opportunities. And this is definitely something that a shark like me doesn’t like.

$25,000 may sound like a big amount to invest, but don’t forget usually you can do a joint account with some close friend or relative. (Or even pull money with several friends if that is needed – this option may not be totally legal in your country however).

Let us then have a quick look at Capital Blu Management Forex Account :

Minimum investment: $25,000

Performance in 2006 – 108%, in 2007 – 24% to November.

There is 30% incentive fee and $100 commission per $1,000,000 traded.

The maximum drawdown so far is 19%

The maximum leverage is 50:1

2007 was not very shining for this account, but looking at 2006 and their money management, I’d say this managed account service has a good potential.

You can in Capital Blu Management (CBM) thru many introducing brokers – for example Altavra – or just search the web with your favorite search engine. Unfortunately I am not an introducing broker for CBM so I can’t connect you directly.

Some time ago we wrote about hot mutual funds. If you have been around the financial world for a while, you must have heard about the emerging economies in East Europe. The mutual funds in the new EU members Bulgaria and Romania achieved great returns – some of them close of above 100% per year.

In the Autumn, when I asked the email subscribers to pay some attention to these funds, there was a nice increase of the prices. However quickly after that in November and December in most East European stock exchanges there was a significant correction leading to most funds losing 10% – 20% of their value. The fund prices have not moved much since then.

While I always believe low market is good time to buy, this correction was a good alarming bell that the East Europe mutual funds can’t keep growing all the time. Many experts think that we won’t see anymore 3 digits ROI here and I tend to agree with them.

You can still think about investing in some East Europe mutual funds, but don’t expect wonders. If you are looking for more aggressive options, see what the emerging markets in Latin America and Asia (India, China) can offer you.

Don’t forget that 50% ROI per year with mutual funds is more than great and rare sustainable long term.