Currense Review – Trade Leaders

Please not that Currensee ceased to exist on October 31st 2014. We’re leaving the Currensee review pages active for reference purposes.

Once you signed up to Currensee’s Trade Leaders Investment Program and want to start copying the trades from other traders automatically in your account, your main task is to choose which traders to follow. Currensee calls the traders you can follow “Trade Leaders” and you’ll find them in the Currensee Leaderboard.

Currensee has a rigorous process and strict guidelines for accepting Leaders into the program. They must pass a due diligence and background check, and will be considered if they have:

  • A live account history on the Currensee Social Trading Network of at least six months of consistent, positive, risk-adjusted performance
  • A disciplined trading style with adherence to strategies
  • Prudent risk management skills with acceptable levels of drawdown and leverage

In addition, their performance and compatibility will be further observed during a testing phase after their live trading account is linked to the Currensee system. Once they been accepted and added to the Currensee Trade Leader Leaderboard, their performance will be constantly monitored to ensure their performance and risk management practises meet the standards. Any technical issues or trading anomalies will also be evaluated on a regular basis.

The Trade Leaders receive 15% of the profits they make for a follower on a monthly basis, based on the High Water Mark. That means if the follower allocated $1000 and they grow that into $1100 after month 1, they receive $15 (i.e. 15% of $100), and $1100 becomes the High Water Mark. If in month 2 they lose $50 and your allocation is down to $1050, they make nothing. If they make$70 profit in month 3, i.e. growing your allocation to $1120, their success fee will be $3 (i.e. only calculated on the profit above your High Water Mark, 15% of $20). At that stage $1120 will become the new High Water Mark.

Because of this payment structure there aren’t many benefits for Trade Leaders in manipulating trades at the end of the month (e.g. carrying over losing trades to the next month). Having evaluated the data of most Trade Leaders on the system, we’ve not seen any evidence that such practises have occurred either.

There’re currently about 20 Trade Leaders on the Leaderboard all with a trading history of at least 6 months. However Currensee don’t make it clear how much of this history was imported. I.e. how much was from when the Trade Leader was trading on their own and not part of the Trade Leader program. New Trade Leaders are often added with a 6 month history and we have seen a few new ones come and go quite quickly (after posting some losses on the program).  Especially with new Trade Leaders there’s always the risk that the trading attitude may change once they start trading for other people (and hence for success fees) instead of just for their own accounts. However, we’ve also experienced some of their most popular Trade Leaders (in terms of numbers of followers) with more than 1 or 2 years of successful results go “rogue-ish” and post massive losses in a single month (>25%) after getting into trouble by keeping adding to losing positions in the hope the market turns.

This is why the monitoring (even as a follower) is still important and you cannot blindly rely on the fact that the Trade Leaders are “pre-selected” as this is no guarantee for success. Currensee also doesn’t display any of the Trade Leader’s data in their interface after they have been removed from the Leaderboard. In our opinion this creates a too optimistic picture of the Trade Leader’s choice. This data would be useful for investors to evaluate so they could try and avoid following similar Trade Leaders in the future.

 

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