Monday, February 20, 2006

Managed Accounts…Are They Really Safe???

For awhile I have been noticing an increasing trend of HYIP investors showing interest in managed accounts, typically Forex.

The term “MA” has even been coined as a result of the growing interest in this. If someone said “MA” in a Forex forum they would be referring to a “moving average”.

As a result of this trend, I have seen “MA” services providers and middlemen appearing more frequently in HYIP forums. The market for this is growing and they are stepping up to take advantage of it. This may not necessarily be a good thing. It will likely cause an increase of them and many will form one just to take advantage of people that have yet to be educated about “MA”.

I have seen people ranging from a guy that had a successful backtest on a MT4 EA and thinks he has gold, to an amateur turned IB (middleman) that found a trader and doesn't know what a good trader is and just cares about his IB fees/commission, and then there are managed account services looking for clients.

Here is an example. I recently joined the Udachu Fund forum because I was interested in joining the fund, but that is another story. In the forum I noticed a thread for a managed account service offering.

Here is the title and link to that thread:

Managed Forex Account (100% your control) But high profits!

That is certainly enough to make someone curious. Who wouldn't be interested in high profits? When I clicked the link I was surprised to find there were only forms to apply for the service. Not even something as basic as performance history was present. In fact, I had heard of the trader before. I previously ran across someone offering the same trader under the same conditions….”20% of new profits based on monthly highwater mark” and “3 pips per round turn”!!!

When I asked for more information from the other person offering the same trader my questions were conveniently ignored. So naturally I wanted to learn more details thinking Rod Spiller of Udachu could fill in the gaps. This is normal to want to know more facts before investing. Wouldn't anyone want to know?

Well you can read the thread yourself to see what happened. By page 3 of the thread you will notice people are already investing without knowing any further details!!! I was asking legitimate questions and at the same time offering a little education so investors would think about it before jumping in. I am by no means an expert, but thought I could share what I know.

In the end, I was accused of speculating and criticizing, which I was clearly not doing. In fact, when I posted to clarify I was doing no such thing….my post was deleted!!

Here is proof:

Link to screenshot before the deletion: The Evidence :)

Link to screenshot after the deletion

As you can see, my post is now missing.

I was very surprised by the defensive nature in the forum, especially from Rod himself. As the person presenting this opportunity he should be fielding questions regarding it. When I come across a lack of willingness to provide details and proof I consider this a red flag. It is only natural for an investor to ask such questions before taking the plunge.

I was told in PM that Rod was doing everyone a favor by offering this. I totally disagree. Rod is the IB (Introducing Broker). Think of an IB as a person getting referral income….and yes an IB does make money from this. He introduces the opportunity and is compensated for it. Go to a Forex broker website and look for “Introducing Broker”. An IB makes money whether the trader makes winning or losing trades. I consider this a conflict of interest. In this position he doesn’t need to have your best interests in mind, he gets paid either way.

In addition, someone on the forum said:

“I have seen this guy is working with a few other groups on the internet as well....”

Rod’s reply to that was:

“Be careful because many of these posts people are seeing are not involved with Chris. In fact he has not even heard of many of them.”

Why would it matter? I have seen others using the same trader and broker. Rod is likely saying this to protect his IB income.

The sad thing is many will jump into a “MA” and do so without trading proof or any type of due diligence. Just like in the example above. They will do it simply because it is a "MA" and think they can't lose because the trader can't run with the money. That is HYIP investor type of thinking. At least with a Ponzi we have a chance to use timing to make something from it.

A managed account is real trading and losses do occur. The trader can easily blow-out your account. Let’s say the trader trades your account down to 30% of what it started at and is no longer able to trade it. Then what happens? Nothing! You were told trading is risky. Not a problem for the trader. The trader just doesn’t get a performance fee. The trader had nothing to lose by trading YOUR money. Not to mention the IB that also had nothing to lose. In fact, the IB is in a winning situation. The IB has no money at risk unless the IB has also invested.

In the end, HYIP investors will need to become more educated in this matter if they want to start utilizing managed accounts. Otherwise they will learn some hard lessons. “MA” could be a scam in another form that HYIP investors may not recognize. New types of scams are always being invented on the internet and “MA” could be one of them. I am not saying all “MA” are. It is up to the investor to educate themselves and decide which ones are scams. Know the pitfalls and what the person offering it has to gain as well as their other possible hidden agendas.

Just because it is a managed account doesn’t make it a golden goose. ;)

7 Comments:

At 9:38 AM, Blogger The Advisor said...

Hi there Snuffy,

I'd like to ask you a favor. Would you kindly update my link into :

Advisor - Best Paid Autosurf

Thanks a million in advance :)

 
At 9:58 AM, Blogger Snuffy said...

Change completed. :)

 
At 5:42 AM, Blogger udachu said...

Hey Genius,

I love how even the most uninformed morons can create the illusion of self importance and give advice. Your not an Udachu member as you claim. And you obviously know nothing about Forex. I also see that you did not have the courage to reply to my e mail. But I understand. You must feel pretty stupid right about now.

Udachu

 
At 7:52 AM, Blogger Snuffy said...

Rod,

I do have other activities in my life that rank higher than responding to you immediately. I composed a reply yesterday and wanted to sleep on it to make sure my thoughts in the email were thorough. Upon waking up and receiving your comment on my blog I read my email reply to you and have now sent it.

One of the many items in the email is that I never claimed to be a member of Udachu and I also ask that you prove where I made such a claim. Now that you are telling this lie in public, would you please post the proof of your claim in this blog for all to see? As I said, I never claimed to be a member.

Another item I address is your unprofessional behavior. The comment you have left in my blog is just another example to add to the list. By acting in this manner you are doing your investors a great disservice.

There are other items I addressed as will in the email.

Since you made this a public matter I would happily post your email and my reply to you on this blog.

 
At 10:54 AM, Blogger udachu said...

I brought nothing to a public forum. I responded to your public claims. I have no interest in an online debate with you. As I told you your posts on the UdachuFund Forum were not what I was explaining when I said speculation. Other people had posted traders names, misinformed returns and leverage used. It was all deleted becuase I did not want people to have the wrong information. What you interpret as unprofessional is nothing more than having to waste so much of my time responding to people that have not completed their DD and make accusations. For example you had a lot to say about not giving you the trading records. Any kid with Photo Shop can make fake records. Real records have to be accompanied with a notarized letter by the client saying that we have permission to discolse this information to potential investors. The records also have to come from the broker. This takes time. But you jumped the gun and assumed we would not provide this. You claimed that I lied in posts about having a close working relationship with Steve C. at chart candle because I only had one phone call to him. If you had read the reply to that 8 month old post you would see that I never claimed to have any relationship with Steve. I said I have a very close relationship with all of my traders. I spoke to Steve once on the phone and determined that his trading style did not fit in with our program. I am sure he is a very good trader and have nothing but good things to say about him. But I do not now nor have I ever invested with him. I have no desire to continue this debate and see no reason to answer any of your questions. My time is more valuable. Good luck in your investing. Perhaps Autosurfs and HYIPs will work out for you. I myself prefer to stick to grown up investing. No offense.

 
At 12:40 PM, Blogger Snuffy said...

Rod,

Here is my reply to your blog comment. I have quoted your comments followed by my responses.

"I brought nothing to a public forum."

I think you need to read your last comment on my blog again. You have indeed made this public. First you thought because I didn't reply to you immediately you felt the need to taunt me by saying the following:

"I love how even the most uninformed morons can create the illusion of self importance and give advice."

Now if you read the article you would have known it is about investors being careful with managed accounts. There is nothing wrong with that. If you feel there is something specific that is wrong with my article then please let me know. I am always looking to improve and it will help others learn.

"Your not an Udachu member as you claim."

You decided to make this false claim public and I asked you to prove it. You still have not done so. First you said this to me in the email which was not public, but now you have said this in public.

"And you obviously know nothing about Forex."

I never claimed to be any sort of expert regarding Forex. The article was not about me exhibiting my knowledge of Forex. It was about doing proper DD when looking at a prospective managed Forex offering. I don't know how anyone could determine my knowledge of Forex by reading the article. This tells me you have either not read the article or it is just an attempt to insult me.

"I also see that you did not have the courage to reply to my e mail."

I have replied. Perhaps you didn't like the truth of it and that explains your sudden change in attitude, although you still feel the need to launch personal attacks.

"You must feel pretty stupid right about now."

You have suddenly changed your attitude about not wanting this to be public. I think we know who feels stupid now. ;)

I am not sure what prompted your email to me. I was asking for managed account information, but received none. What I received was something totally different. People will see for themselves when if I post it. :)

No back to your last blog comment.

"I responded to your public claims."

I would hardly call that responding to my public claims. It contains no facts. In fact, it contains insults and false claims from you saying I claimed to be a UF member which you have yet to support with evidence.

"For example you had a lot to say about not giving you the trading records. Any kid with Photo Shop can make fake records. Real records have to be accompanied with a notarized letter by the client saying that we have permission to discolse this information to potential investors. The records also have to come from the broker. This takes time."

I am aware of what real proof is. However, you never said you were going to obtain this proof and was defensive regarding my inquiries. My article shows this. Why are you offering a service if you do not have the proof first to show investors? By doing this you are asking them to invest without any proof. In fact, you have already let investors invest. I noticed in the past you strongly encourage people do their DD before investing, but for an investment you offer it is quite the opposite. Don't you think that is hypocritical?

The rest of your blog comment regarding Steve C., etc. is addressed in my email to you. Since I may post it on the blog there is no sense in making this current blog comment longer. I will say your claim in the blog comment is a lie because you said something different in an interview, but have now decided to rewrite history after I shown you the link in my email reply to you. BTW, I saved the interview page in case you try to have it changed.

"My time is more valuable."

Mine is as well, but is yours? If it were, your email to me would have either answered my inquiry or just not sent one at all. Yet you took the time to say what you said and also had the time to taunt me on my blog. It would have been more productive if you stuck to the facts and were not telling lies. Now I am answering your lies about me in public.

"Perhaps Autosurfs and HYIPs will work out for you. I myself prefer to stick to grown up investing. No offense. "

I noticed you like to insult or take a backhanded shot at someone and then follow it up with "No offense". Saying "No offense" does not make it not offensive. Regarding autosurfs, this is something I play with a little and if I make profit that is great and that profit goes to more solid investments. One of those solid investments will not be Udachu Fund. People will see why if I post the results of my DD in my email reply to you.

If people like to play with autosurfs then that is great they are doing what they like. I do not look down upon them like you have. In addition, I happen to know of good Forex traders that do play with HYIP's on the side. Do you realize by definition Udachu Fund is a HYIP (High Yield Investment Program)? You have basically just insulted Udachu Fund investors.

I don't know why you felt the need to email me in the manner you did and then follow-up with a crazy blog comment. What was it that set you off? Was it because I was asking questions about your managed Forex offering?? Do you have something against someone doing their DD before investing? Your defensive stance alone is enough to drive away investors.

I have no problem posting the emails between us on my blog. I do not consider them personal emails because they stemmed from my inquiry about your managed Forex offering which makes it a business email.

 
At 1:16 PM, Blogger Mbongwe said...

Udachu/Rod,

You are too emotional and not enough intelligent to participate in normal discussion. Better concentrate on running your so called program and stay away from showing your vulgarity.

 

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