| FXCM is disappointed and surprised by the recent performance of our Managed Account programs. We apologize for any losses that you have experienced. The strategies behind the programs were extensively back-tested to prevent the type of sharp drawdowns that have occurred. However, today's market conditions do not have a historical precedent. Although we believe the strategies would perform well if more normal market conditions returned, we do not know when this will occur. To address the current market conditions, we are making the following changes in the programs, immediately. - Lower Leverage: All programs will now operate on approximately 2 times leverage. This reduces the amount of leverage employed by more than half. If lower leverage had been employed prior to recent market moves, losses would have been much lower. However, less leverage would have also reduced the gains during the programs' good months. Given the recent drawdowns, we are taking a more conservative approach by lowering leverage.
- Programs will Follow More Focused Trading Approaches: Each program had employed multiple strategies in order to be effective in diverse types of market conditions. However, the diversification did not provide protection against the current conditions.
We are simplifying the focus of each program. For example, the Sentiment program will now exclusively follow trending strategies; therefore, program returns should directly correlate with a program's core strategy. As a result, the core strategy of a program will not be dragged down by non-related, poor-performing strategies. - The Sentiment Programs will be renamed Trending Strategies Program and Trending Strategies Program II. Both will have identical trading approaches and leverage.*
- Short-Term Opportunity Programs will be renamed Ranging Strategies Program. The program will attempt to capture the moves of currency pairs moving in ranges.
- Dynamic Multi-Strategy will have ranging and trending components.
FXCM will not receive a single penny of profit sharing until you make back all of the money lost by investing in the programs. FXCM receives 20% of all the profits generated by the programs. FXCM employs a high-water-mark approach: we will not receive profit sharing until you have recovered your losses and are profitable. In addition, we will lower the management fee to 1% through June 2009. Important: Attend a Live Q&A FXCM Managed Account Webinar on Tuesday, September 9, 2008 at 1PM (EDT). To attend the webinar, login five minutes before it starts. Login Here What Should You do Now? You can keep your money in FXCM Managed Account Programs and we will work to recover your losses and hope to generate future gains, though losses may continue to occur. An alternative is a Forex System Selector Account, which allows you to create your own custom portfolio from over 40 back-tested trading strategies and have them automatically traded. Forex System Selector enables you to pick your leverage, manually intervene in trades, and turn systems on or off, on demand.* Learn More You can also open a self-trading account. Whichever option you choose, we have a dedicated team of account specialists prepared to help you. Please feel free to contact us 24 hours a day at 888-503-6739, or email us at info@fxcm.com, or request a call. We look forward to serving you. Best regards, |
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