Currensee Review – Our Opinion
Please not that Currensee was closed on October 31st 2014. We’re leaving this review active because it may still be useful. As you notice we were fairly honest and open in our opinion that this was a poor social trading network. Hence it was not too surprising to us that over time they ceased to exist.
Currensee is marketed as the social trading network for the serious investor. Their social network gives you access to information from “real live” traders. If you trade forex currencies yourself, the “Dashboard” is very useful as it gives you a snapshot view of the long vs short positions of all the traders connected to their social trading network. If you like to interact with other traders online you can easily search for traders with similar strategies to yourself and create your own trading community.
If you don’t want to trade yourself you can sign up to the Currensee Trade Leaders Investment Program and automatically follow trades from other traders in your own account. This program is targeted at investors who want to treat this a long term high yielding investment and can start investing with $10,000 or more. The default risk management which is applied to your capital means you’re unlikely to see >30% swings from month to month. For each trader (“Trade Leader”) you’re also only risking the part you allocate to them. The Trade Leaders are also vetted and because they trade with their own money, the same risk they apply to their own balance is applied proportionally to your allocation.
Because there’re only about 20 vetted Trade Leaders to choose from and the service is targeted by Currensee at investors without much previous Forex trading skills, the information to evaluate their strategy and past performance are kept simple. It’s very quick to see how many other followers they have and the performance in the past (as % gain per month and year). Adding them to your portfolio is easy and default risk management is automatically applied to your account. If you’re an experienced trader you can also change the leverage you take per Trade Leader and hence increase or decrease the risk you take in your account. In addition, your Currensee account manager will assist you if needed. The frequency by which you review your allocations will depend on your risk profile and investment style, though changing the allocations is again straight forward.
The ongoing costs are fairly high (Currensee are the only social trading network to charge a 2% maintenance fee), but the way their additional 20% success fee is calculated is fair. It’s based on the High Water Mark of the allocation per Trade Leader and only based on the actual value in your own account (i.e. you’re not paying any fees on any slippage or any trades which were not automatically copied in your account).
A key issue we found with Currensee to date is the slippage (tested with 2 different brokers, one US, one non-US). Depending on the Trade Leader you follow the results can be 1 to 5% worse per month due to trades which failed to copy and trade execution price differences.
If you’re expecting to double your account in a week or month, Currensee is not for you. However if have limited FX trading experience and are looking to benefit from the potential gains in trading Forex markets in a managed fashion and are happy to trust someone else with pre-selecting the traders for you, then Currensee may be for you.
In our opinion though we don’t feel that the high costs currently justify the quality of the traders (Trade Leaders) you can follow and the functionality of Currensee’s Trade Leaders Investment platform. We’ve experienced quite a few Trade Leaders being added on their program with 1 year or more of positive historical results, only for them to post heavy losses and being subsequently removed. We also feel there’s a lack of transparent information made available (especially on open trades) in order to properly evaluate past performance and monitor current positions. The lack of a demo account and high initial investment requirement also means it can be a costly exercise to try their service and platform.
Currensee Review Pros:
- Trade Leaders are vetted and monitored centrally
- Trade Leaders are only paid by you for the money they make in your account
- Automated risk management in terms of % drawdown at Trade Leader level
- High initial investment required (Min. $10,000 but realistically at least $30,000 if you want to invest in a few different Trade Leaders because some have a minimum allocation requirement of $10,000)
- High costs (2% annual Currensee management fee on balance + 20% success fee)
- High slippage meaning the results displayed on the Currensee are significantly different than those in your account
- Not Fully Transparent:
- Every trade done by the Trades Leaders is visible in their history though only with date stamp, not time stamp and leverage, making the data not usable for own analysis
- No ability to view the current open trades of the Trade Leaders you consider following (from experience some Trade Leaders may leave losing positions open for over 3 months, so not knowing this may create a distorted view when reviewing them)
- No data shared on Trade Leaders which have been removed from their Leaderboard over time
- No information on how much $ the Trade Leaders invest themselves
- No demo account
- No integration between the social network and investment platform (e.g. no ratings or feedback comments on the traders you can copy)
- No local telephone support numbers (US number only)
Please note that on September 23rd 2013 OANDA, a US foreign exchange broker, acquired Currensee. While in the short term it seems nothing will change in the service, it’s unclear how this will impact the future strategy and direction. E.g. will customers be required to hold their broker account with OANDA? When we have more info we’ll update this review as well.
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