21/12/2010 - Beta 2’s Trading System Preparing Them To Challenge The Trading Fraternity.
Beta 2, an advisory Forex (FX) and Precious Metal Investment Boutique have been performing well above even their own expectations since implementing their bespoke trading system across their clientele. The City organisation who offer the retail investment market an advisory trading service in exchange for 0.1% commission each trade, have recently introduced a technical trading system designed by their Managing Director Lane Clark, which they used to success when building a track record for an FX fund that they are looking to launch shortly.
The system which sets very unique instructions and parameters for his traders to then utilise is currently yielding returns for trading accounts of all sizes, and clients with a variation of risk parameters. Some of Beta 2's clientele have accounts starting at 10,000GBP where others trade millions on a daily basis. Currently- the results remain the same; success for the clients.
In fact at the time of going to press Beta 2's clients who have been taking all of the trading signals that their bespoke system generates- have been rewarded with having 27 out of their last 30 trades liquidated in profit. The most impressive factor of all is that with every trade that is generated by the system- a hedge is generated too. So the client’s portfolios are hedged- yet they're still managing to get as many trades right as they currently are. This statistic is up to the close of the US markets on Friday 10th December 2010.
Managing Director Lane Clark believes that although he was confident of performance for his advisory clientele, he does believe the current period of trading is a period of over performance. He stated that "Although our performance is incredibly good right now, I do believe this is a purple patch that you maybe only achieve every quarter or two. With the system we have in place (hedged strategies) our goal is to manage to get 60% of our trades of the profitable variety.
The key at Beta 2 is risk management and we believe by working with our clientele and ascertaining exactly the risk parameters they are comfortable working within- we can build their portfolio accordingly. We understand that the markets we trade in are perceived to be at the more speculative end of the investment spectrum, but rather than view this as a risk- we believe it is an opportunity.
When investors open a trading account with us, we give them an internal risk rating between 1 and 10 based on their level of experience, their account size, and their appetite for risk. Once our traders understand the risk rating of their clients, we allocate the same trading signals across the board- but in different increments pending the variables mentioned. Therefore, regardless of whether the clients are very high risk, or have a risk threshold far lower- they can take the same trades.
We hope our clientele are extremely satisfied with their current performance and we believe that even if we can't maintain our current performance in 2011, that at least they will know that we will be managing their risk to the best of our abilities and their portfolios will always be fairly well hedged."
From the outside looking in we think it's safe to say that Beta 2's clientele are more than a little content currently, particularly as in the current climate it does seem like returns are harder to generate.
The question on most market technician’s lips is what is the system that Beta 2 are utilising, so we put the question to Lane Clark. "Basically, it is a trading system that as long as our portfolios are sized and positioned correctly that we are confident in yielding returns regardless of the market climate. Like any investment organisation, we obviously can not guarantee returns- but we believe that in periods of underperformance with how we structure our portfolios- the downside will be limited to a predetermined level of percentage drawdown.
For the technicians out there, I'll tell them that this strategy is a form of a trend following system, but all trades have an element of a hedge with them. We analyse three timeframes before entering the market on each trade (daily, hourly, and five minutes). On the daily chart we ascertain what the trend is and how strong the momentum is, and where an entry price would be. This is done by looking at four moving averages, the ADX, the RSI, S.Stochs and candlestick charting. Once we have determined our potential trade, we move onto the hourly charts where we will look for confirmation of the trade using very similar indicators. Finally, if our criteria are met on both timeframes this is what we would term a high probability trade, and we would then refer to the 5 minute chart for entry. We introduce support and resistance on the entries and the ADX indicator increases in importance. We may trade a break out, fade a break out, or trade the range.
Our stops vary on the daily volatility of the market but generally range between 1.5 to 2.5 ATR. Profit stops are utilised 95% of the time and are placed the same distance away, although, technically we may take our profits if we don't believe the trade will reach our initial profit objective.
Our analysis generally finds us 4-6 CORE trades per week, which we then supplement with 4-6 SECONDARY positions which act as a hedge and risk 70% of what the CORE positions risk.
Most importantly of all is the size of the positions we purchase for our portfolios, and depending on the risk rating we give our clients their core positions can risk as low as 0.5% of their portfolio per position to 5% plus (risk rating 10 out of 10).
We are quietly confident that the system will continue to perform for our clientele, and we hope that they continue to trust us to manage the more speculative end of the investment portfolios."
If the rumour is to be believed, Beta 2 have steadily been accruing new clientele, and their Director of Trading Jovi Overo who manages many of the clients believes 2011 could be a very fruitful one for the operation and their clientele, "We formed in 2007 with the view of attempting to take advantage of the increased volatility created by the credit crunch debacle, and it has taken a few years and a lot of hard work to make us feel that we're very close to competing with some of the larger organisations out there. We work very closely as a team here, and with the systems we have in place- we're finding it very easy to manage our accounts in a very effective manner. Unlike some investment houses who have numerous advisors offering a variation of advice, one of the many benefits of operating with Beta 2 is that if you are working with me, or working with one of my team- you will still be building the same portfolios, albeit in slightly different sizes. Recent performance has seen a large percentage of my clients allocate further funds to Beta 2, and if we can continue to be consistent, continue to manage our risk as effectively as possible, and continue to offer the personalised service- I envisage this continuing."
Below is a variation of client accounts who participated in all of Beta 2’s advisory trading recommendations from the period of 15th of November 2010 to the 10th December 2010. This information should not be used as the basis to invest with Beta 2. Past performance is not indicative of future results. These statements have been provided to assist with the understanding of the trading system explanation in the recent article in regards to our organisation.
DISCLAIMER.
This material is not an offer of any services or an offer to enter into any agreement with us. Beta 2 Limited provides its services exclusively under an agreement with the client subject to the applicable legislation. By submitting this material Beta 2 Limited does not represent or warrant and does not accept any obligations (whether expressed directly or indirectly)in relation to rendering any services, the quality of the services, or their applicability for the specific purposes and objectives of this material recipients.
Clients should note the following: Trading Derivatives is highly speculative. Leveraging your transactions increase the potential for loss as well as profit. As this is a contingent liability transaction you may be called upon to make payments during the life of the contract. Past performance is not necessarily indicative of future results. Please read disclosure materials carefully before you send money or initiate your first trade. Beta 2 Limited (FSA number 475922) is an appointed representative of Park Caledonia Associates (FSA number 162559) who are authorised and regulated by the FSA to conduct business in the United Kingdom.
About Beta2
Beta 2 Limited are a Foreign Exchange and precious metals advisory trading organisation based in the City of London. Founded in 2007, the Beta 2 Forex advisory service has continually strived to provide high-net worth individuals, speculators, corporations and institutions with high quality investment advice. Beta 2 Ltd is an appointed representative of Park Caledonia Associates Ltd which is authorised and Regulated by the Financial Services Authority. FSA Reg. No.475922.Company Reg. No. 6430966.
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