In cooperation with the strongest partners in bright investments

Transcription

1 PORTFOLIO MANAGEMENT BY ASSET-CODE FX STRATEGIES In cooperation with the strongest partners in bright investments The content of this information sheet will inform you about the portfolio software series of Asset-Code FX has to offer you, full automated developed software for the financial markets.

2 CONTENT Portfolio management by Asset-Code FX strategies page 2 Investment objectives page 2 Investment strategy page 2 Strategy advantages page 3 Portfolio comparison table page 4 Product information page 4 Broker & account information page 5 Product risks & costs page 6 Additional information page 7 Portfolio product content page 8 What are tradable currencies and the differences page 10 Major Currency Pairs page 10 Cross-Currency Pairs or Minor Currency Pairs page 10 Exotic Currency Pairs page 11 Reading a FX Quote page 12 Nicknames of some specific currencies page 12 What are leverage products page 13 What is risk page 15 What is the difference between Investing and Trading page 15 General note page 17 Copyright Asset-Code FX 2016 / Last update November

3 Portfolio management by Asset-Code FX strategies In cooperation with the strongest partners in bright investments Asset-Code FX is a Belgian company which is specialized in software development for the financial industry. Today s complexity of modern techniques and volatile market conditions are a challenge to build software with innovative ideas. The special cooperation between Asset-Code FX and the broker has a lot of financial experience to share. We are specialized in fundamental and technical market analysis, trading and computational intelligence applied to the specificity of Forex investment. We design and implement sustainable and performing trading solutions. Investment Objectives The investment objective of the diversified program is to provide stable capital gain by trading foreign exchange instruments. The investment strategy is designed to provide returns by reducing the overall risk of your portfolio. As an investor you need to diversify your portfolio in different kinds of strategies, markets, companies, in liquid and fixed underlays. Investment Strategy The foreign exchange market is the largest in the world in volumes and liquidity and it is very diversified. It therefore allows our high class automated trading solutions to seek and identify short and medium term opportunities to make profit while minimizing risk. These profit opportunities are available in falling as well as in rising markets. The system uses a combination of strategies which varies according to market conditions such as trend, volatility, price stability and fractal/scaling characteristics combined in cycles. The quantitative measures of the diverse market characteristics are estimated using proprietary methods and algorithms. The global strategy is based on fixed pools of take profit levels by an extraordinary trading logic with different philosophies in market analysis. The current developed strategies are applied to a diversified portfolio of using 1 up till 6 major or cross over foreign exchange pairs only. Copyright Asset-Code FX 2016 / Last update November

4 Strategy advantages Possibilities to adjust your own risk profile on the capital you choose to invest Stop trading in a few minutes when requested (during office time): daily liquidity Adaptive to changing market conditions, trade 24 hours including the weekends Transparency: daily and monthly report sent (if capable by broker) Secured private client area for detailed real-live information Higher returns over long term period and attractive risk return ratio Positive returns in declining or rising markets Alternative investment accessible to individuals and institutions alike Deposits are held segregated in a Tier 1 Swiss bank Online helpdesk Office Europe broker (UTC +2) opening hours local time Office Europe Asset- Code (UTC +1) opening hours local time Office Indonesia Asset-Code (UTC +7) opening hours local time For urgent calls central number 24 / 24 hour available Skype Asset-Code Copyright Asset-Code FX 2016 / Last update November

5 Portfolio comparison table ASSET-CODE FX PORTFOLIO FULL AUTOMATION STRATEGIES COMPARISON TABLE Product information Portfolio strategy Development By Asset Code Risk level Initial trade size per order based on minimum investment Minimum Investment Capital protection on initial deposit Fully hedged level of balance total reached by automation Margin call by broker secured on initial deposit Pairs to trade AC Trader r Pro Swizzy Institutional AC Trader Pro Trendy Dynamic Institutional Own Conservative % 40% 50% Own Moderate % 40% 50% Majors & Cross pairs Majors & Cross pairs Copyright Asset-Code FX 2016 / Last update November

6 Broker & account information Portfolio strategy Broker Deposito bank Segregated account Choice of account currencies EUR for MAM Leverage MAM connector ECN _ STP Server location Licensed a Swiss Tier 1 bank yes yes 1 to 200 Pro Swizzy Inst. yes Equinix LD4 Slough London Licensed a Swiss Tier 1 bank Yes Yes 1 to 200 Pro Trendy Dynamic Inst. yes Equinix LD4 Slough London Copyright Asset-Code FX 2016 / Last update November

7 Product risks & costs Draw Down target Equity use target Performance Fee Spread widening Management fee Strategy Profit withdrawal Target gross yield yearly App. 2% app. 4% 35% HWM 2 no Pro Swizzy Inst. Allways free of charge > 100,- app. 15% App. 3% app. 5% 35% HWM 2 no Pro Trendy Dynamic Inst. Allways free of charge > 100,- app. 24% The broker add a fixed cost to the raw spread AC TRADER series of $ 8,-- per full contract traded of $ 1.000,-- value. For institutionals, larger investors, private banks and banks we are processing special documentation which will be available later on in our websites. Copyright Asset-Code FX 2016 / Last update November

8 Additional information Investor profile Conservative The conservative strategy is developed for investors trading on short and middle long term positions by lower risk. The conservative strategy offers investors a high security of capital. The system holds a standard leverage with a Draw Down percentage of around 10%. Moderate The moderate strategy is developed for investors who are searching for a substantial growth controlled by a good money management. The moderate strategy is a balanced product between risk / reward. Dynamic The dynamic strategy is a strong system for short trades with a higher risk where temporary equity use can be a part during trading. The dynamic strategy is only allowed for investors who are not reserved for a higher controlled Draw Down and equity use over a certain period of time. Over a longer term, the system can produce a significant higher performance. FULL RISK The most risky strategy Asset Code provides you. A strong mathematical based highest risky strategy with a very good risk/reward ratio in this niche segment. The strategy is only allowed for existing followers of another AC TRADER strategy. Only a fixed deposit is allowed with obligations and no insurance and jurisprudential covering. Recommendation Diversification of your investments will give you a healthy portfolio of risk management. We strongly recommend investors not to invest a substantial high amount of their savings with us. Markets and strategies which can be followed at Asset-Code FX are leverage products software with a high substantial of risk to lose a certain amount of your investment. Investors need to withdraw from time to time their profits so the initial deposit will be guaranteed after a certain period of time. Take highly care where to invest. Be aware of scam in the financial markets. Ask for regulation- and registration number at your authority of Financial Markets in your country or at the authority where the company is registered. Account activation Account activation will normally take place at the same day the deposit arrived into your segregated investment account. Deposit First deposits and additional deposits can be conducted any time with taking the activation time in mind. Withdrawal Withdrawals of profits and deposits can be executed any time. Keep in mind larger withdrawals can have effect on margin requirements. In case of a larger withdrawal please inform us in upfront so we can ensure running positions to close without any unexpected and unnecessary losses. Definitions HWM = High-Water Mark Performance numbers are estimated figures and this does not mean future performances will be equal to past results, because of market conditions and volatility. Please read the risk warning Copyright Asset-Code FX 2016 / Last update November

9 Risk Warning Margin FX and CFD products are considered speculative products which are highly leveraged and carry significantly greater risks than non-geared investments, such as shares. You should not invest in Margin FX or CFD products unless you properly understand the nature of Margin FX and CFD products, and are comfortable with the attendant risks. You should obtain financial, legal, taxation and other professional advice prior to entering into a Margin FX or CFD transaction to ensure this is appropriate for your objectives, needs and circumstances. Portfolio product content Asset-Code FX is a fully automated software for multi-currency trading. It is a stand-alone software for Forex (Foreign Exchange Currency Exchange Rate trading) systems in a highly risky market. The basic idea is based on fix-api 1 on MT4 multitasking automated software Expert Advisors. The system is developed to find weaknesses in all kind of market liquidity conditions on any kind of currency pairs. Each currency pair has own settings to enter specific market conditions by specific chosen levels. Asset-Code FX strategies are countering the market with hidden stop loss (stealth) and has a very special dynamic system for take profit performances which are set immediately when the order is sent. So actually there is no open position without a full control over the order at any time. The automated trading system of Asset-Code FX is a pure price action movement strategy categorized as a cycle trading product for short, medium and long term periods and most active in moving markets if volumes are stronger on the move. Several trades a day can be expected with an adjusted risk percentage of the balance total in an environment of dedicated money management. The main goal is to achieve a superior risk reward ratio with a low or acceptable equity use on initial deposits or balance. The moment of activation can show a slightly different start then statistics. Therefore preferably we will activate accounts on every working day early in the morning of the week during London time. The system performs in normal market conditions as well as in better volume traded conditions. Increased volatility can be fully managed by the automation. Unexpected higher slippage, spread widening are consistently checked and have fixed maximum values before a trade will be executed to open the order or to close. During very specific time schedules by events the automatic trading can be switched off to protect clients balances from false signals but in general the automation runs 24 hours a day during the whole week and will trade over the weekend too. Gaps after the weekends won t harm the system or the results of the strategy by specific mathematical calculations. Nevertheless Asset-Code FX built in security system software (12 levels) to cover and secure all trading profiles provided in the portfolio overview. Building systems like this could be done only by skilled and experienced professionals. Behind the scene all strategies are covered by people monitoring on daily basis. Because of changing market conditions we keep an eye on all kind of reports we get out of the log files so the system can be checked to minimalize eventually upcoming errors. Therefore it s important to know that the software and the source code is an industrial property of Asset-Code FX which controls the total system together with the broker. Asset-Code FX is grounded by a group of professionals who has a lot of experience and education in the Forex market as well as programming in high level skilled techniques for more than 10 years. 1 fix = financial information exchange / API = Application Protocol Interface Copyright Asset-Code FX 2016 / Last update November

10 Different kind of strategies developed by Asset-Code FX can be followed via the contracted broker, an independent ECN-STP which is regulated and holder of European passports at the Financial Markets. A Tier 1 Swiss bank is the Swiss leader in online banking for all segregated accounts. This Tier 1 Swiss bank is regulated by the Swiss authority FINMA. Asset-Code FX will be in the very near future an official agent of the brokerage firm, which is already MiFID II approved. Estimated monthly and yearly returns including all market ratio s and statistics can be viewed on the independent research site of for Live trading accounts. Enjoy your trading Copyright Asset-Code FX 2016 / Last update November

11 What are tradable currencies and the differences Major Currency Pairs Major currency pairs all contain the US Dollar on one side either on the base side or quote side. They are the most frequently traded pairs in the FOREX market. The majors generally have the lowest spread and are the most liquid. The EUR/USD is the most traded pair with a daily trade volume of nearly 30% of the entire FX market. Pair EUR/USD USD/JPY GBP/USD USD/CAD USD/CHF AUD/USD NZD/USD Countries Euro Zone/United States United States/Japan United Kingdom/United States United States/Canada United States/Switzerland Austrailia/United States New Zealand/United States Cross-Currency Pairs or Minor Currency Pairs Currency pairs that do not contain the US Dollar are known as cross-currency pairs or simply crosses. Historically, if we wanted to convert a currency, we would have had to first convert the currency into US dollars and then into the currency which we desired. With the introduction of currency crosses we no longer have to do this tedious calculation as all brokers now offer the direct exchange rates. The most active crosses are derived from the three major non-us dollar currencies (the Euro, the UK Pound and Yen). These currency pairs are also known as minors. Pair EUR/GBP EUR/CHF EUR/CAD EUR/AUD Countries Euro Zone/United Kingdom Euro Zone/Switzerland Euro Zone/Canada Euro Zone/Australia Copyright Asset-Code FX 2016 / Last update November

12 EUR/NZD EUR/JPY GBP/JPY CHF/JPY CAD/JPY AUD/JPY NZD/JPY GBP/CHF GBP/AUD GBP/CAD Euro Zone/New Zealand Euro Zone/Japan United Kingdom/Japan Switzerland/Japan Canada/Japan Australia/Japan New Zealand/Japan United Kingdom/Switzerland United Kingdom/Australia United Kingdom/Canada Exotic Currency Pairs Exotic currency pairs are made up of a major currency paired with the currency of an emerging or a strong but smaller economy from a global perspective such as Hong Kong or Singapore and European countries outside of the Euro Zone. These pairs are not traded as often as the majors or minors, so often the cost of trading these pairs can be higher than the majors or minors due to the lack of liquidity in these markets. Pair EUR/TRY USD/SEK USD/NOK USD/DKK USD/ZAR USD/HKD USD/SGD Countries Euro/Turkish Lire US Dollar/Swedish Krone US Dollar/Norwegian Krone US Dollar/Danish Krone US Dollar/South African Rand US Dollar/Hong Kong Dollar US Dollar/Singapore Dollar Copyright Asset-Code FX 2016 / Last update November

13 Reading a FX Quote As we have already said, when a currency is quoted it is paired with another currency. So the value of one is reflected through the value of another. The base currency is to the left of the pair and the quote currency is to the right. Let s look at an example: In this case the Pound Sterling is the base currency and the Japanese Yen is the quote currency. Therefore: 1 = However when we are trading financial instruments such as currencies we are offered two slightly different prices. We have the sell price (also known as the bid price) and the buy price (also known as the ask price). The bid price is the best available price at which we can sell to the market. The ask price is the best available price at which we can buy from the market. The difference between the two prices is what we call the spread and this is how our broker generates revenue. It is the cost of placing a trade. In this case we can see the EURUSD has a bid price of and an ask price of The difference between the two is or what we call three pips. In our next article we will discuss the calculation and importance of understanding pips and pip values. Nicknames of some specific currencies American dollar $ called Buck Australian dollar $ called Aussi Canadian dollar $ called Loonie Euro called Euro New Zealand dollar $ called Kiwi Sterling (pound) called Cable Copyright Asset-Code FX 2016 / Last update November

14 What are leverage products How does the leverage products mechanism work? Trading Forex means investing in Foreign Exchange, e.g. Euro against US dollar. The investor deposits the money on a segregated account at the broker or at the bank which the broker cooperates with. Leverage enables you to gain a large exposure to a financial market while only tying up a relatively small amount of your capital. When you invest in a leveraged product, the provider will ask you to put up a sum representing just a fraction of the total value of your position. Effectively, the provider is lending you the balance. Your profit or loss is based on the full position. So the amount you gain or lose might seem very high in relation to the sum you ve invested. It could even be much greater than your initial outlay. Trading on margin Your initial outlay is referred to as a margin or deposit requirement. Your provider will request this to cover or part-cover any potential losses you may incur. The margin is always a fraction of what it would cost to buy the assets directly, but the exact size depends on various factors a more liquid and less volatile market will require a smaller margin (e.g. 5%), whereas a volatile market may require a larger margin. Some products require margins as a fixed amount per contract, while others are calculated as a percentage of the value of the position. How leverage works A 10% margin means that for just $100 you could get the same exposure as a $1000 investment. This represents leverage of 10 times, or 10:1. Let s say you want to buy 1000 shares of XYZ Inc. At the current share price of $1, this would cost you $1000. If the share price goes up by 20c per share, you can sell out of your position at 1000 shares x $1.20 equals $1200 and make a $200 (or 20%) profit. However, some providers will offer you the chance to buy XYZ Inc shares using leverage. All you will have to do is put down a margin a percentage of the full value of $1000 and you will retain the full exposure. Let s say the initial margin requirement is 10%. You would pay 10% x $1 x 1000 shares = $100. And if the share price rose from $1 to $1.20 you would still make the same profit ($200) as if you had bought the shares outright. You have made the same profit in both cases, but using leverage you only had to put down $100 as margin instead of the full $1000. Your return on investment is 100%, as opposed to just 20% if you had to purchase the assets directly. Copyright Asset-Code FX 2016 / Last update November

15 Magnified profits and losses You can see that using leverage is a great way to magnify your exposure in a particular market. However, it should always be kept in mind that leverage not only magnifies your potential profits but also your potential losses. It is possible to lose much more than your initial margin if the market turns sharply against you. For information on how you can protect yourself against potential magnified losses. Read below What is risk. The benefits of leverage The primary benefit of leverage is that it frees up your capital, as you only have to commit a fraction of the value of the assets you are interested in. With leverage you can take a much larger position than you could with a direct physical holding. This means you can get the most out of your capital, and perhaps invest in a range of different assets instead of restricting yourself to one or two. However, you should bear in mind that when trading with leverage you give up the benefit of actually taking ownership (in the case of shares) or delivery (in the case of futures). It is also vital to remember that you could be called upon to put down more margin and cover your losses if the market goes in the wrong direction for you. Who uses leveraged products? Investors and traders use leverage to magnify their exposure to various markets. This allows them to free up their capital to commit to other investments, thus spreading a set amount of capital much further than would be possible by buying the physical assets. You can use leverage on most markets, including shares, Forex, commodities, indices, bonds, ETPs and more. Forex is an especially highly leveraged market, with some brokers offering leverage of 400:1 and upwards. Naturally there are risks involved with such great leverage, and you should take care to fully understand the risks involved. Firms also use leverage in much the same way, to invest in assets that have the potential to return a relatively high yield. A common corporate strategy is to use debt to finance operations. This is done because businesses feel they can make returns on these investments above the cost of the interest they need to pay on their debt. Copyright Asset-Code FX 2016 / Last update November

16 What is risk? In finance, risk is the potential that your chosen investment may fail to deliver the outcome you anticipate. This could result in lower returns than expected, but it could also mean losing all or part of your original investment, or in certain cases even more than this. Market risk Market risk is the ever-present potential for your portfolio to suffer losses due to fluctuations in the market s risk factors. These are the components of a market that are often volatile and exert significant pressure on prices. Generally, the key market risk factors are: Stock prices Interest rates Foreign exchange rates Commodity prices These four are the key factors as they exert the most pressure on the market. Another name for market risk is volatility. Liquidity risk Liquidity risk stems from the possibility that you will be unable to trade an asset without affecting that asset's price. It is generally more of an issue in emerging or low-volume markets, and comes in two types: 1. Asset liquidity This refers to an asset s ability to be traded if nobody wants to buy, for example, then a stockholder won t be able to sell their asset, or they may have to sell at a less favorable price. If there are a lot of active traders, this will usually create good liquidity as there are likely to be a mix of buyers and sellers who are willing to trade. The more liquid a market is, the easier it is to buy or sell that asset. Asset liquidity is an important part of market risk. 2. Funding liquidity This refers to the ability to meet your financial obligations as soon as you need to. Funding liquidity risk, then, is the possibility that over a certain time period, one party (for example the bank) won t have the funds available to settle its obligations straight away. Funding liquidity most often applies in markets where assets are traded in high-volume blocks, or where the assets themselves are of a particularly high value (such as property or housing markets). Copyright Asset-Code FX 2016 / Last update November

17 What is the Difference Between Investing & Trading? Investing and trading are two different ways that we can profit from the financial markets. Many people new to the world of finance can be confused over what is the difference between the two. Here we will describe what we mean for each. Investing The aim of an investor is to gradually build up their net worth by buying and holding a portfolio of stocks, bonds, mutual funds or other investable instruments. Investments are often held for years or even decades. Investors take advantage of certain perks such as dividend payments, coupon payments and/or interest during this time. When the markets fall in value, many investors will hold on to their investment in the expectation that the price will rebound. Investors are therefore looking at the long-term value of their investment and aren t too concerned with the day to day volatility in the market. Investors take physical ownership of the instruments they have purchased. So for example, if an investor buys shares in a company they will physically own a portion of that company and will receive a certificate of ownership. A shareholder can carry certain privileges such as voting rights on certain corporate actions, as well as benefit from dividend payments on the profits.. Trading Trading, on the other hand, is the more frequent buying and selling of financial instruments with the aim of outperforming buy-and-hold investments. There is no ownership of the underlying asset so traders are merely speculating on the price movement. Traders can therefore profit from falling markets as well as rising ones. A trader can buy an asset just like an investor but traders also have the ability to sell an instrument without owning it. This is known as short selling and is why many people are particularly attracted to trading. It is a key concept to understand and is a major reason why traders can outperform buy-and-hold investors. While investors are often satisfied with annual returns of up to 15% depending on the risk element of the investment, some traders seek to make returns that are a multiple of this, as they can benefit from the dips in the market as well as the increases because of the ability to short sell. The length of time a trader has a position open for can range from seconds to years. This timeframe is entirely up to them and relates to their objectives, account size, risk profile and time they can commit to trading. Trading requires a more hands on approach than investing and regular assessment of market conditions is essential when traders have open positions. Copyright Asset-Code FX 2016 / Last update November

18 General note In case of investments in leverage products be aware to choose the right company. Do not invest in products or companies which are not registered, not addressed or which do not have an official office with registered phone numbers. Even on website registration you should find the owner. If none of this can be provided by authorities, do not invest your savings. Copyright Asset-Code FX 2016 / Last update November

19 Asset-Code FX Asset-Code FX Headquarters Indonesia Bretheistraat 128/3 Jl. Marina Emas Barat Blok A Genk Surabaya Belgium Indonesia Phone Mobile Mobile support@asset-code.com Asset-Code FX, Asset-Code FX - Pro, Asset-Code FX - HFT-Art, Asset-Code FX - RS Dynamic - AC TRADER & AC TRADER Pro are trademarks & brands of Asset-Code Hinderink GCV Copyright Asset-Code FX 2016 / Last update November