IMPORTANT MAM / PAMM AND LINKED ACCOUNT

UPDATE: - April 2024

CHANGES AND RESULTS

CURRENT MARKET CONDITIONS

In the last two to three weeks, the market has experienced severe trading conditions that have adversely impacted our services.

The Japanese Yen weakened beyond most traders' expectations, with extremely strong trends recorded in all crosses. This was an unprecedented event, as it breached a 30-year level of weakness without any support from the Japanese Government and continued onwards. Such a drastic and unexpected market movement was a significant factor in the adverse impact on our services.

These trends are bad for the trading techniques used in the MAM / PAMM and linked services. Unfortunately, once trades have been opened, little can be done to reduce their damage. In the MAM service, Money Managers avoided a total disaster by closing JPY crosses, hedging, and manual pruning. They somehow contained loss to an average of 24%.  The linking service is not managed; out of the 60 to 80 linked accounts, there were three blown accounts.

THE MAM/PAMM ACCOUNTS

RECENT RESULTS

As stated above, the MAM/PAMM accounts reached a desperate survival level on Friday.

Here is the overall service status at the close of trading on Friday. The overall loss was 35%. Money Managers avoided a total disaster by closing JPY crosses, hedging, and manual pruning. The partial recovery of the JPY also helped.

At the close of trading on Monday, the Money Manager could report the results below. An improvement of 14% from a loss of 35% to one of 21%.  Containing the loss at 21% (Although the result is a loss)

The account being a very high risk account carrying 30% more risk than normal in addition and the wild market conditions caused the Liberator portfolio +30% risk account to experience a margin call, resulting in a 90% loss.  The normal Liberator portfolio account is one of our best performers over this period pointing to the dangers of higher risk.

Important MAM Changes:

CHANGE OF MONEY MANAGERS: The EQUITI Broker accounts are traded by an extremely competent and experienced Money Manager using the pseudonym of Algo Trader, who has produced the best results over the life of the MAM/PAMM service. Except for considerable manual intervention in the last two days, he has only used Expert4x Robots during the trading. Expert4x will move its accounts trading to “Algo Trader” in the future. This will be effective from the 1^st of May and there are no actions required from you end as the accounts will remain with BlackBull.

CLOSING OF EXISTING OPEN TRADES: The JPY crosses will not be traded for now. All open trades containing the JPY will be closed during the handover, and many other open trades may also be closed. This will enable the Money Manager to create alternative strategies using specific currencies. The loss will not increase when closing any trades because those deals have already been considered in the Equity balance.

CHANGE OF MAM ACCOUNT NAMES: The table below shows the change of MAM account names that will reflect the Money Manager trading them. The performance fee stays the same.

FUTURE PROSPECTS: Before the exception of the JPY forex Market event, the MAM/PAMM accounts generated +/—10% gains a month (ignoring drawdowns). Monthly gains slightly lower than that (5% to 9%) are expected to be produced.

LINKED ACCOUNTS SERVICE

The linking service is not managed; three of the 60 to 80 linked accounts were blown accounts. The Hedge trading Robot is capital-intensive and could have done better in these strong trends.

The changes mentioned below will help prevent future losses. Account settings are continuously reviewed to improve their safety.

The current linked account portfolio seems to have missed most of the market drawdowns:

https://www.fxblue.com/users/linkableactts/portfolio  and https://www.fxblue.com/users/linkableactts

Accounts that were placed in the suspended group did not do that well, with links Link8h and Linkh9 experiencing margin calls and a few more battling:

https://www.fxblue.com/users/suspendedwifollowers/portfolio and

https://www.fxblue.com/users/suspendedwifollowers/

We expect the linked service to normalise once the JPY volatility and trendiness settle.

CHANGES TO THE TRADING ROBOTS

Too many trades facing the wrong way during the latest extreme trends experienced by the JPY crosses have badly impacted us.

We will learn from this experience to introduce a pruning function into our Liberty and hedged EA.

This option will reduce risk and exposure to swap/overnight costs, which can become a major trend factor. It will potentially take advantage of the slightest retracement to reduce open trades made in strong trends.

How this option will work:

The pruning option is a choice. You can either activate it or not use it.

When activated, it will become effective after several negative trades are opened.

When the most recent open trade retraces by its gap size, the most recent trade and the trade with the biggest negative balance that will not cause a combined loss will be closed. This is likely to result in a small gain. This should also have a minimal impact on the group target.

The result will be that the number of open trades (if this happens after the five trades) will reduce from 5 open trades to 3 open trades, and the normal trade logic will continue to apply. If the five open trades do not retrace, the system will continue until a retracement meets the pruning requirements.

This means that pruning (reduction of 2 open trades) will happen every time there is a retracement equal to the current gap size (in pips) from the opening of the most recent trade. The normal trade logic will continue to apply to the remainder of open trades.

The upgrade will probably happen in the next ten days or so.

The linking service and the MAM Money Managers will use this new functionality when available.