Regardless of how much time you choose to devote to trading, you have to be able to access the markets quickly and reliably at all times. News from FXCM last week highlights the importance of having the option to keep in touch with events and how this efficient broker is improving its offering on this crucial point.
The press release from FXCM reads:
“Follow Traders directly from your phone, download the ZuluTrade Mobile App: an integrated solution to make your trading life even simpler.”
Copy Trading is increasingly popular, which explains the IT rollout to customers. If you aren’t in a position to devote the time and effort required to develop your strategies, the ability to copy the ideas of other traders can be a useful way to gain exposure to the markets.
The more ‘hands-off’ approach suits many but there are still risks involved. Allowing any third-party to manage your finances comes with inherent risks. That is the case if you opt for an institutional-grade investor; however, the demise of banks such as Barings and Lehman Brothers highlight the need to be risk-aware.
For that reason, the technical spec of the new app caught our eye.
“Get push notifications each time a position is opened/closed in your account, access charts and browse your trading history instantly!”
The push notification at the time of trade offers you a degree of security. The additional transparency means you can check if the trader you are copying is following the investment approach that attracted you in the first place.
It is, of course, straightforward to stop copying a trader at any time so spotting any anomalies early could be crucial to preserving your capital if something does go wrong.
The extra functionality is to be welcomed. It does need, however, to be considered in addition to, rather than instead of, the fundamental pillars of risk management.
- Past performance is no guarantee of future results.
- You never see a bad simulation – traders, even bad ones, can keep working on models and trading histories and just throw away the bad ones. If the 99th effort is successful, you may end up copying a trader who at 98 other times lost money.
- CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
The app itself is well designed and user-friendly. The ZuluTrade system which FXTM use for their Copy trading service has functionality which on the whole maps over to the smaller screen.
For clients of FXCM, it is now possible to complete the following on hand-held devices:
- Evaluate the performance of traders you may want to copy
- Use the Simulation Results monitor to calculate a predicted (but not guaranteed) potential Return on Investment (ROI)
- Follow the innovative Trader Combos tool
- The Top Traders screen, which ranks traders according to performance and risk profile
The app is free to download in Android and iOS format and logging in can piggyback off Apple, Google or Facebook accounts.
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