Wrong autotrading incentives for signal providers

Hi, they already have this system called ManagedBook but unfornately, it is not yet available to most of the brokers.

At the moment offered via Varengold Bank, ADS Securities and soon it will be also offered via Swissqoute Bank.

Originally posted by Rick

Hi,

don't you think we should ask fxstat to change the fee structure of the autotrading? Signal providers currently earn money just for the VOLUME they are trading, but not for the SUCCESS of their trades.

Example: Imagine two systems:

System A: does 10 trades of 0.5 lot volume each, and earns 20% of equity

System B: does also 10 trades of 0.5 lot volume each, but loses 50% of the equity

Clearly system A is more successful and should therefore earn the signal provider more money! It is therefore paramount that fxstat switches to a performance-based fee structure: A high-watermark success fee of 20% is industry standard among hedge funds and should also be introduced!

Fxstat is providing two services. Tradebook and Managedbook. In tradebook you pay per lot traded. In managedbook you pay success fee. So it is upto you, how do u want to join fxstat autotrading services.

Originally posted by richdadfx

Hi, they already have this system called ManagedBook but unfornately, it is not yet available to most of the brokers.

At the moment offered via Varengold Bank, ADS Securities and soon it will be also offered via Swissqoute Bank.

 

Aww. I didn't know is was cattered to specific brokers.  Also they haven't offered a solution for US citizens as of yet. 

Why is this?  Is'nt both features TradeBook and Managebook all DRIVEN by an EA transmitter like most third party signal providers? 

If it is an EA, we shouldn't be restricted to a broker.  

Originally posted by IPNDASNO

 

Originally posted by richdadfx

 

Hi, they already have this system called ManagedBook but unfornately, it is not yet available to most of the brokers.

At the moment offered via Varengold Bank, ADS Securities and soon it will be also offered via Swissqoute Bank.

 

 

 

 

Aww. I didn't know is was cattered to specific brokers.  Also they haven't offered a solution for US citizens as of yet. 

 

Why is this?  Is'nt both features TradeBook and Managebook all DRIVEN by an EA transmitter like most third party signal providers? 

If it is an EA, we shouldn't be restricted to a broker.  

You can use any broker for autotrading. Specific brokers are only to save autotrading cost.

For example, if you register with fxopen, you will not have to pay autotrading cost bcoz fxopen is partnered with fxstat. But if you open an account with any other broker, not partnered with fxstat, you will have to pay autotrading cost which is given here http://www.fxstat.com/en/autotrading/prices

Originally posted by uniquetrader

......

Fxstat is providing two services. Tradebook and Managedbook. In tradebook you pay per lot traded. In managedbook you pay success fee. So it is upto you, how do u want to join fxstat autotrading services.

I still don't understand why there Tradebook & managedbook feature.

If commission system in Tradebook can be detrimental to follower, why is this feature still exist?

What are the advantages between managedbook & Tradebook? ... especially for follower

no it is not detrimental. Actually it depends on trading style too. In some scenarios tradebook is suitable and in some scenarios managedbook is better.

For example a trader opens 1 standard lot (or 10 mini lots or 100 micro lots) of eur/usd pair. Assume that he is making an average of more than $50. Lets say $60/month.

If he is using tradebook, he will have to pay fixed price per lot which is $10 in this case.
If he is using managedbook, he will have to pay 20% of profit which is 20% of 60 = $12.

Now we assume that he is making less than $50 per lot on average. Say $40/month.

In tradebook, cost will be $10.
In managedbook cost will be 20% of 40 = $8.

In first scenario tradebook is better for signal follower and in second scenario managedbook will cost less.

But we do not know future results. We will have to calculate it on the basis of past data.

Originally posted by uniquetrader

no it is not detrimental. Actually it depends on trading style too. In some scenarios tradebook is suitable and in some scenarios managedbook is better.

For example a trader opens 1 standard lot (or 10 mini lots or 100 micro lots) of eur/usd pair. Assume that he is making an average of more than $50. Lets say $60/month.

If he is using tradebook, he will have to pay fixed price per lot which is $10 in this case.
If he is using managedbook, he will have to pay 20% of profit which is 20% of 60 = $12.

Now we assume that he is making less than $50 per lot on average. Say $40/month.

In tradebook, cost will be $10.
In managedbook cost will be 20% of 40 = $8.

In first scenario tradebook is better for signal follower and in second scenario managedbook will cost less.

But we do not know future results. We will have to calculate it on the basis of past data.

 

Good example. Just a little addition:

that it also depends on trading style. For example a scalper will have much less average as compared to other traders. So if a trader is following a scalper with micro lot, it may not be much feasible for him. Scalper may earn a lot but follower will earn according to his lot size. In this situation managedbook will be useful for followers.

after read this analysys,,, I guess managedbook is most suitable for follower.

in tradebook, if signal provider have loss, so follower get loss too and follower still have to pay fee..... it's double disadvantage for follower.

but in managedbook, if trader & follower have loss, so trader will get no fee.... i think its fair.

very interestng and knowledgable topic , looking forward to new posts

I prefer ManagedBook. It is a fair solution for both