We trust that this update finds you well as we wind up the 3rd month and our first quarter of trading in the 2010 year. This is a rather lengthy update, but we encourage all investors to read through it in its entirety as there is some important information herein.
Thank you once again to all our investors who have participated with us in the Cayo Flow FX systems and entrusted their hard earned funds for the month of March. While we can never complain (too much) when we come out positive overall, this was a rather tough and annoying month for our systems as they all ran into difficulties at one point or another during the month. However we are still pleased with the outcome this month. We have updated the performance figures for each system on their corresponding information page on the website. Here are the results of March’s trading activity for our 3 systems…
MARCH 2010 PERFORMANCE
Precision FX: +15.43%
Chrome FX: -5.08%
Guardian FX: +3.23
March Average: +4.53
2010 Q1 PERFORMANCE
Precision FX: +77.86%
Chrome FX: +39.53%
Guardian FX: +46.86%
Q1 Average: +54.75
Our Performance Table has also been updated with the following statistics of interest…
Thank you once again to all our investors who have participated with us in the Cayo Flow FX systems and entrusted their hard earned funds for the month of March. While we can never complain (too much) when we come out positive overall, this was a rather tough and annoying month for our systems as they all ran into difficulties at one point or another during the month. However we are still pleased with the outcome this month. We have updated the performance figures for each system on their corresponding information page on the website. Here are the results of March’s trading activity for our 3 systems…
MARCH 2010 PERFORMANCE
Precision FX: +15.43%
Chrome FX: -5.08%
Guardian FX: +3.23
March Average: +4.53
2010 Q1 PERFORMANCE
Precision FX: +77.86%
Chrome FX: +39.53%
Guardian FX: +46.86%
Q1 Average: +54.75
Our Performance Table has also been updated with the following statistics of interest…
MONTH | PRECISION | CHROME | GUARDIAN | AVERAGE | |
Dec-08 | 32.30% | 72.73% | 52.52% | ||
Jan-09 | 18.70% | -4.19% | 7.26% | ||
Feb-09 | 27.50% | 160.30% | 93.90% | ||
Mar-09 | 29.50% | 21.97% | 25.74% | ||
Apr-09 | -34.40% | 61.33% | 13.47% | ||
May-09 | 53.30% | 33.35% | 3.52% | 30.06% | |
Jun-09 | 23.60% | 25.77% | 4.69% | 18.02% | |
Jul-09 | 10.10% | 20.69% | 4.13% | 11.64% | |
Aug-09 | 26.92% | 10.77% | 4.86% | 14.18% | |
Sep-09 | -0.32% | 5.44% | 5.79% | 3.64% | |
Oct-09 | -4.26% | 20.36% | 6.55% | 7.55% | |
Nov-09 | 10.76% | -20.98% | 30.98% | 6.92% | |
Dec-09 | 9.37% | 15.94% | 10.39% | 11.90% | |
Jan-10 | 33.63% | 27.91% | 16.02% | 25.85% | |
Feb-10 | 15.31% | 14.93% | 22.63% | 17.62% | |
Mar-10 | 15.43% | -5.08% | 3.23% | 4.53% | |
TOTAL COMPOUNDED RETURN: | 822.98% | 2521.42% | 183.26% | 1175.89% | |
MONTHLY AVERAGE: | 16.72% | 28.83% | 10.25% | 21.55% | |
MONTH END RECAP
Trading this month was a bit of a roller coaster across all systems. PFX (Precision FX) started the month off terrible with a close to 4% drawdown on the very first trading day of the month. Not how we like to start each month on day 1. However, it quickly recovered from the loss the next day, and ended up being our most profitable system this month! GFX (Guardian FX) made a nice steady profit throughout the month, and then encountered a series of consecutive losses which are rare for this system resulting in draw down of just over 4%. It started to dig itself out near the end of the month and closed out March in a small but appreciated profit. CFX (Chrome FX) was the bad apple this month, and suffered some good sized drawdowns mid-month which will be discussed further below as the system is undergoing a bit of a facelift. Returns for March were taking on the account balance of the last day, not equity, as we had open positions and floating drawdown still in effect with positions hedged.
NEW DEVELOPMENTS
Changes to Chrome FX: Many of you have contacted us regarding the changes occurring in this system. As you may have seen in the account, there are two new sub-strategies which are being implemented into the overall system (in addition to the scalping and grid trades). They are being implemented in strategically so as not to interfere with the core strategy and more programming is being completed to monitor all systems at once and ensure they are working synergistically with each other (this is a large task). Overall this change is going to diversify the strategy, and will be a very positive amendment to the system as a whole, which will bring much more stability to the account compared to what we have often seen in the past. We will not see as large of swings as we have in the past. We know many of you with riskier appetites are drawn to Chrome for its aggressive profit targets. We can assure you that the system will still be our most aggressive one targeting the highest monthly returns, however now we believe we can still do this by substantially lowering our risk exposure. We ask that you all hang in there during this transition period, as you may not see much action on the account at times, or you may see some activity that does not look like the normal strategy. But Chrome FX will remain a power house. It is just in the final stages of its makeover. The hedge will be removed soon, and all systems will be able to run in unison together. The core developer described the situation to us as that of a “master control station” being constructed and put in place to monitor and control all systems simultaneously to ensure they are working well together and complimenting one another as apposed to working against each other. It is very close now, and we expect to see it fully implemented within the next week. We will be working along side both him and the broker to ensure that the system is implemented correctly and smoothly without any problems. We are looking forward to the outcome, and think that all will be pleased as well.
McLaren FX - The resurrection shall soon be imminent (in true Easter spirit). The McLaren FX system has been “hard at it” for the month of March and is looking to be even bolder and better than ever. We are anticipating the re-release of this system by May and will keep all previous and potential investors posted.
Broker Upgrades – In addition to some of the updates that have been going on with us and our trading systems, our broker is also applying a new update to our MAMs. This is expected to be complete by tomorrow and has numerous enhancements. We actually traded yesterday, however the division of profits will not be distributed to all sub-accounts until all the updates are applied. We have informed our broker that we are also doing some updates to our trading systems, and that our timing is not the best, but we have been assured that the upgrades will be seamless. So clients may see a bunch of historic trades from yesterday and today land in their account at once. Again, our master accounts are intact so we can trade, but the division/allocation of profits/losses will not be applied to all individual accounts until the MAM updates have been applied.
A Note About Changes and Upgrades – Our apologies to our investors for the pile of upgrades/changes happening at once. We have no control over the upgrades happening with our broker, but we are happy with how they handle them and consult us about them. This is a necessary and good thing. Regarding our changes to the Chrome FX system, we realise it often sets off an alarm to some of our investors. We believe that just randomly changing up strategies for no apparent reason (even if just because of a drawdown) is nothing short of financial suicide. However, it also goes without saying that one of the most important factors of long-term trading success and profitability over the long-term while achieving a constant and steady level of growth is in one's ability to adapt and evolve with the dynamics of the market within which they are trading. The Forex market is extremely complex and continually shifting and the unique price behaviour of individual currency pairs is always experiencing new “cycles” in similar fashion to most markets as a whole. In our view, one has to be able to adapt to survive and achieve longevity in their trade plan.
This is why in our opinion many strategies are profitable for a while, then turn stale. Maybe those strategies will be profitable later, maybe never, or maybe they simply just need some “tweaking”. We have great relationships with the teams surrounding all our systems and if a case is presented to us regarding a change, we listen and collectively decide if it looks worth while and truly beneficial. If so, we look at the data supporting this, and either make the change or not. In the case of Chrome, since its inception the strategy has changed over 5 times in terms of the underlying strategy, the pairs traded, the duration of the trading session etc... and so far it has gone the distance. It would be foolish of us to say that any of our systems are now final and will never change again because the chances are that they will continue to develop over time.
A Note About Longevity – We have had quite a few questions regarding this during the month of March from both prospective and current investors. Many wonder how long we can sustain our performance, and how long we may be willing to continue providing this service to investors. Being savvy investors ourselves we realise the importance of long-term and value investing. This is also the only true way to be able to take advantage of the 8th wonder of the world (compound interest). While we cannot give any guarantees on our longevity, our short-term goal is to offer managed FX accounts for at least another 2 solid years, assuming we do not max our liquidity or run into problems getting filled. After this timeline, we may look to wrap this into a fund structure of sorts where it will continue from there. Should we run into any problems with liquidity or execution in the meantime, we always have the luxury of closing the doors to new investors.
We have never desired to be the biggest fund or managed account provider by any means. Just a successful group who caters to smart, savvy and longer-term investors. For those who share that same mindset as us, and understand the risk/reward nature of alternative investments, we truly look forward to being able to churn some nice profits for your portfolio. Unfortunately many people still see Forex as a “get rich quick scheme”. While we are sure many do get rich quick, and while we have also had our share of big and aggressive profits, we are more focused on consistent, sustainable, yet above average returns. We know that many FX traders come and go almost over night sometimes. This is certainly not the model we wish to follow and longevity is very important to us, and we will do what it takes to ensure we have a lengthy lifespan. Our team works full time on this endeavour and we are all very passionate about it, and the same goes for our partners, JV’s, IB’s, developers and associates. We believe we have what it takes to grow organically and go the distance. We hope to revisit this in 2012 as our first bench mark in our business plan.
Segregated Accounts – Beta testing of the segregated accounts is now ready to commence at 2 of the 3 banks our broker is working with. Again this will only be available for HNW clients with $1M+ USD. We have a lot of interest surrounding this, and we are excited to see it available for those who are interested in participating. This will not be an advertised product, but available to select individuals or entities on a case by case basis who may have difficulty moving their funds for whatever reason or who are not comfortable in doing so. Our broker has been very busy with many new endeavours in addition to the segregated accounts such as adding new banks to their liquidity, adding new deposit banks, more accounting staff, a new feed, and possibly a new office in Dublin, just to name a few. They are very busy, as we are glad to have the relationship we have with them.
Account Discrepancies – Again, if your returns for a given month do not match our posted returns take note that our numbers are from the 1st of each calendar month, to the last trading day of the calendar month. If you have invested in the middle of the month, your numbers may not match ours. Our returns are gross of performance fees which are deducted at the end of each month. If we have open trades at month end, we calculate our return on the current balance that day, not the floating equity. For certain systems we have noticed small discrepancies between large investor’s accounts (100K+) and very smaller investor’s accounts. This often has to do with the broker’s min positions sizes and how they are distributed with the allocation software in our MAM. All accounts are never out more than a percent, and usually match within a fraction of this.
Account Audits – We expect to have our first audit published this month for Q1 2010. We are still preparing the necessary documents needed for this, and hope to have them ready for the firm to conduct the audit by end of week. We will publish the audit to the site once it has been completed.
Please visit our website and blog for frequent updates and newsletters, and do not hesitate to contact us at any time should you have any inquires, concerns, or partnership arrangements you would like to converse about.
Thank you to all our current investors for your trust in trading with us, and we look forward to making April another month of profits for all!
Warm Regards,
The Cayo Flow team
Warm Regards,
The Cayo Flow team
