SOCIAL TRADING
CONTENTS WHAT IS SOCIAL TRADING? 4 BECOME A FOLLOWER 5 Finding Top Traders Create a portfolio Test your portfolio Executing a live portfolio Fees Risk management 5 5 6 6 6 6 BECOME A TOP TRADER 7 Simple rewards Street Trader Advanced Professional Risk-Adjusted Institutional Top tips 7 7 8 8 8 9 9
WHAT IS SOCIAL TRADING? SOCIAL TRADING WHAT IS SOCIAL TRADING? In recent years, spread betting/cfd trading has revolutionised financial investments, becoming increasingly popular among seasoned traders and newcomers alike. At perhaps the most basic level, it has become easier than ever for ordinary people with a degree of capital to invest this and maximise their potential returns. Social Trading further revolutionises the traditional investment format, expanding the boundaries of financial spread betting/cfd trading and allowing users to receive trading signals from traders with a proven track record. ayondo has a large quantity of Top Traders, all of whom regularly conduct trades that you can copy quickly and easily. Before choosing the people you would like to lead your investments, you can analyse their performance history, check out the levels of profit they have been making and see how many other users are following their trades. Imagine if Twitter was used only by the world s most successful stock market and currency traders - and they posted all of their trading ideas for online followers to see. Vanessa Kortekaas, THE FINANCIAL TIMES When you open an account with ayondo, you have the option of becoming a Follower or a Top Trader. As a Top Trader, your performance will be monitored and you can ascend through five career stages, earning greater commission payments as you progress. Regardless of the route you decide to follow, it is quick and easy to fund your account using either a credit or debit card, or via a bank transfer. In addition, unlike other forms of fund management, ayondo does not charge any fees for executing trades, so you will not face any unexpected costs whether you decide to become a Follower or a Top Trader. 3
BECOME A FOLLOWER BECOME A FOLLOWER One of the key differences between Social Trading and regular spread betting/cfd trading is highlighted in the name - it is social. Rather than being left to your own devices to select and execute trades, you can source information from a wide range of fellow investors, hand-picking those with the highest success rates. Financial markets have long been prohibitive to new users, with very little transparency, a range of hidden costs and uncertain levels of security. ayondo Social Trading is changing this and making investment easy for everyone, allowing Followers to create a portfolio of up to five Top Traders. Finding Top Traders ayondo gives awards to the Top Traders depending on their performances, making it easy for Followers to determine the levels of success these users are achieving and how valuable they may be to their portfolio. In order to ensure it is as simple as possible to identify and select the traders that will comprise your portfolio, the ranking list is available in two display modes, with the user s performance, risk and number of Followers always in view. With just a few clicks, you can follow traders directly from this screen. You can study how the Top Traders have performed over a period of time, selecting historical periods and analysing how they have developed their capital. A range of charts can be displayed, making it easy to swiftly compare users. The Trader Risk Score is also a useful tool: allowing the risk of each trader to be consolidated and displayed as a number between 1 and 10. Past transactions are clearly and transparently displayed, with each trader s profile containing all the necessary statistics. In addition, each and every trade occurs in real time and can be monitored instantly. Create a Portfolio To select a Top Trader and add them to your portfolio, simply click and drag the user directly from the ranking list. You then have the option to configure the collection of users you have identified as a whole, or make specific changes for any of the individual traders. As a Follower, there are varying degrees of involvement you can choose to have when it comes to your portfolio. If you trust the traders you have selected completely, you may decide to receive the signals and copy all of the transactions they make. However, it is entirely possible to follow a user for just a single underlying product - particularly useful if the Top Trader s history suggests they are an expert in one market, but may be attempting to expand into others they have not yet proved successful in. If you become confident in the performance of your portfolio, you can multiply the selected values and increase the level of risk per request, while traders you deem to be underperforming can be removed with just one click. Again, a series of easy-to-follow charts make it simple to immediately assess the impact of any changes made to your settings. 4
BECOME A FOLLOWER Test your Portfolio If you re uncertain if you ve selected the right traders for your portfolio, or would simply like to monitor their performance over a period without risk to your capital, you can test it using a virtual account. This option is also open to users who would prefer to test out the ayondo Social Trading platform before opening a live account and adding funds. In these instances, the portfolio will be exposed to real market conditions using virtual funds and you will be able to monitor how it has performed and the returns you would have made had the transactions been completed using real money. Furthermore, you can save and test multiple portfolios, allowing you to identify which is likely to prove the most successful. When you are satisfied with the performance of a portfolio, those with a live account can instantly switch it to begin executing trades with the real money account. Executing a Live Portfolio Even as a Follower, you can play an extremely active role in the performance of your capital, taking charge of your portfolio, adjusting the settings and swapping out traders for others at any time. With a minimum deposit of just 1,000, you can mirror the capital curve of a much larger account, allowing you to leverage the same proportional gains as someone risking far more capital. This is possible because ayondo markets bas been established as an innovative broker based in London, offering trade quantities below the traditional minimum order size. ayondo markets is headquartered in London and is regulated by the Financial Conduct Authority and there are stringent controls in place to secure client money. In addition, user funds are protected up to a maximum of 50,000 by the Financial Services Compensation Scheme, and by additional insurance cover of up to 500,000 per client.* *T&Cs apply In the case where the bank in which ayondo hold client funds fails, the FSCS will compensate up to 75,000 per person. Fees CFD and forex brokers will typically have a minimum order size of 1 unit for the German DAX index. As a broker, ayondo markets allows users to trade sizes well below this level, so that a 1,000 account can access trades translating to 0.001 DAX units. Despite benefiting from the signals sent by Top Traders, Followers are not required to pay any fees either to the trader or ayondo for facilitating the service. Instead, ayondo receives a share of the bid/offer spread from the broker and passes part of this onto the Top Trader in the form of a commission payment. Risk Management When dealing with your finances at any level, risk management is a vital aspect and ayondo provides the necessary tools to ensure this is easy, including the facility to determine a maximum loss level using the Loss Protection feature. Top Traders career levels should be used as a guideline when selecting traders to be included in your portfolio, with the criteria required to progress specifically determined so that those who have reached the higher levels will generally be the most experienced and less risk-inclined users. So once you re following and copying the signals sent by a selection of Top Traders, you can sit back and wait for the profits to pile up, right? If only that were the case! Unfortunately, it isn t and it s important to remember that even those who have a high rate of success do experience losses, and you will copy these as well as the profits. For example, if you have 1,000 in your account and want to ensure you are not risking any more than ten per cent of this, you would set your Loss Protection level at 900. Should your account s net liquidation value - that is, the account balance + profit or loss on open positions - reach this level, all trades will be closed out and no additional transactions will be executed. It is important to play an active role in managing risk, reviewing your profit/ loss level and monitoring how each individual member of your portfolio is performing for you. Remember, you can also close or change your open positions at any time. Depending on the trader or underlying product in focus, you can decide to increase or reduce your risk as you see fit and you can guarantee full control of your account by determining your maximum loss at whatever level you are comfortable with. 5
BECOME A TOP TRADER BECOME A TOP TRADER With ayondo, you can choose to become a Top Trader yourself, sending out signals to your own Followers and earning commissions on these trades. There are five career stages to progress through and those with the best risk/return profiles can ascend to Institutional level, where it is possible to earn the most. Simple Rewards Top Traders earn a percentage of the gross spread income generated by Follower volume, with this percentage being dependent on their career level, and their status as a Real or Virtual Money Trader. It is quick and easy to calculate and claim your monthly commissions as the invoice section of your account will show your billing. Here, your overall trading volume and your commissions are displayed automatically. The more Followers you have, the higher the volume. Send your invoice to ayondo GmbH in Frankfurt. All invoices will be paid within 10 business days of receipt. Street Trader All Top Traders begin their career at the Street Trader level and you will be required to prove yourself over the course of a month. If you manage to keep your risk in check during this period and meet the stipulated criteria, you will progress to the next level. Within these 30 days, you must complete a minimum of five round trades and your maximum drawdown can be at most 25 per cent. This limit ensures the trading career rewards sustainable and risk-adjusted trades, and sanctions those that are regularly risking too much. A trader s maximum drawdown is the percentage level attributed to the deepest level of the capital curve. For example, If a Top Trader had an account balance of 150,000 and endures his or her biggest loss, losing 24,000, this would take their balance down to 126,000. When expressed as a percentage, this means the trader risked 19.04 per cent and knowing this figure allows Followers to draw conclusions regarding the trader s risk profile - if he or she has risked this amount in the past, we should be aware they may do it again. It is recommended that all Followers take this into account and so it is something Top Traders must also ensure they monitor. After this time, you must have a performance of at least 0.5 per cent. 6
BECOME A TOP TRADER Advanced If you have demonstrated signs of promise and progressed through to the Advanced level, there are stricter criteria you will be required to meet to maintain this level or progress even higher. Over a 60-day period, you must complete a minimum of five round trades, without undergoing a trading pause exceeding 30 days. In addition, you must maintain your maximum drawdown at no more than 25 per cent. Your performance since the start of your trading career must be at least one per cent. Having met all of this criteria, you will be able to progress to the next level. Professional As the name suggests, at the Professional level things become more serious and this is the point at which Followers really begin to take note of your performance. It is important to remember to keep your risk management in check as you progress, with Followers unlikely to be interested in adding you to their portfolio if your drawdown percentage is too high - even if you have provided strong returns. If you cannot meet the required criteria for performance and control of risk at this level, you will fall back and may retreat as far as Street Trader if you do not satisfy the Advanced level criteria this time round. At this level, a minimum of 15 round trades must be completed within a 90-day period and you must not have taken a trading break of longer than 30 days since the beginning of your career if you intend to progress any higher. Once again, your maximum drawdown must not exceed 25 per cent. Your Professional Trader performance must increase once again, as you must have a performance of at least 1.5 per cent since the start of your time as a Top Trader to progress to the next level. As a Professional, the earliest date at which you can progress comes after 90 days at this level. Risk-Adjusted When you reach the Risk-Adjusted stage, more and more Followers with large funds will select you for their portfolios and copy your trades. It is therefore recommended that you reduce unit amounts during drawdown phases, increasing again only when confident you are on a winning run. Over the course of 180 days, you must complete a minimum of 15 round trades. Once again, trading pauses of more than 30 days are not allowed. Again, the maximum drawdown limit remains the same. However, you must increase your performance to at least three per cent if you hope to progress to the highest level of Social Trading at ayondo - something that is possible if you have satisfied this criteria for a 180-day period. 7
BE CO M E A TO P TRA DER Institutional Top Tips The Institutional level is the pinnacle of an ayondo Top Trader career and your trades will be executed on a significant number of large customer accounts. You can easily track and monitor the amount you have earned from your Top Trader account and there really is no upper limit to this figure, which is capped only by the number of Followers you have and the amount of lots generated as a result. Having progressed to this stage, you will now receive the highest percentage share of gross income generated by Followers and may also be eligible for additional performance fees. However, your key statistics and trading performance will continue to be monitored, so it is important to ensure you do not simply sit back and relax once you have reached this level - you must continue to perform well if you intend to stay there, and will fall back if you fail to meet the required criteria. Producing an annual return of at least six per cent, it is necessary to ensure your maximum drawdown does not exceed 25 per cent and you complete at least 30 round trades per year. It is obviously in your best interests to accrue the largest number of Followers possible as quickly as you can, but it is important you do not take unnecessary risks in order to do so. Executing regular trades is also important, as Followers will generally be unwilling to grant you a spot in their portfolio if you are only entering a handful of signals per month. It takes a lot of effort to reach the Institutional level of an ayondo Top Trader career, but the progression is designed to guarantee the rewards are more than worth it once you get there and maintain your position. Contrary to popular belief, the majority of Followers do not simply seek out the Top Trader with the highest performance level. Instead, most prefer to assess a trader s capital curve, preferring those that demonstrate low drawdowns and minimal volatility - even if this is at the expense of performance. 8
SOCIAL TRADING +44 (0) 20 3330 0865 www.ayondo.com