What Makes a Forex Trader Successful?

A lot of people become more attracted to trade foreign currencies (also known as forex trading) nowadays. Most of the people think that forex trading is one of the easiest ways to gain financially. They don’t seem to know how much hard work this industry involves.

Most experienced traders at the XFR Financial Ltd would tell you that they weren’t truly prepared for the challenges of the market. As a matter of fact, they don’t know what they were getting into. It is said that approximately 80% of people had lost an ample amount of money before they quit the industry.

Therefore, if you are considering to get into forex trading and be a successful trader in order to generate money, you should be ready to know what makes a trader successful. Whether you want to become a long-time trader at XFR Financial Ltd or go to forex trading for an extra income, the requirements of succeeding in the industry remain unchanged.

There is definitely no shortcut to making money with forex trading. However, there are several common characteristics that successful traders have. Among them, the most common would be that they do intensive research, learning, and training. You can learn the industry in various ways: through online or classroom.

Training for forex trading requires discipline, according to XFR Financial Ltd. What makes a trader unsuccessful is their greed and fear. You should train your mind to overcome emotions if you want to succeed and become a profitable trader. It is vital that you should understand that when you win a trade, there is someone on the losing end. To increase your chances at winning, you need to be a serious trader.

Another thing is that you cannot win all the time with forex trading. Thus, you should be prepared to lose sometimes. It is important for you to know how to handle your losses. Learning to deal with it can make your career as a trader. If you can’t, you might end up as a loser. People who have suffered major losses are the ones who don’t have an idea how to handle a loss. They make illogical decisions and lose more money in the attempt of getting back what they’ve lost.

Aside from understanding he basics of trading, you should also consider other ways of trading your money and then choose the one that would best suit you.

DLL, Terberg, Stena Line Successfully Joined Together in International Fleet Management Transaction

Stena line has been a faithful customer to tractor manufacturer Terberg for over 30 years and the latter is very proud to be working with them. One of the proofs that their partnership has a lot of future together is the recent transaction which involves an order of 76 tractors. The tractors which Terberg provides come with many options. Thus, Stena lines should ensure that they got the best drivers. Someone that is equipped with skills and knowledge about the job. It is important that they can handle heavily loaded roll trailers and those trailers that come with low kingpin heights. With these tractors that come with optimized financial solution package of DLL enables Stena to provide works which they are known for, which is shipping cargo. This is according to Frank Oerlemans, Terberg Benschop. Additional comments comes from Marie Dunkley, the UK country sales manager for the Construction, Transportation & Industrial industries at DLL which states that Terberg has previously worked with DLL on a larger transactions is Europe and later on introduced us to Stena Line this deal. Provided With the knowledge that we have regarding the assets and materials handling industry, we can surely provide terms that are more suitable for general asset based financial suppliers because most often than not, they have been struggling with this.

Structuring the transaction was quite complicated because it would be a long term project, running from 7 to 10 years with high residual values as well as multiple jurisdictions. Good thing that they come up with a tailored solutions which will allow Stena Lines to retain its flexibility and other options which is offered by Stenberg. In fact, DLL even bought four units which has already been delivered and was leased back to make sure that the entire fleet will land under one financing platform. As for DLL, being one of the global fleet centric, financial solutions partnered with local knowledge, they know that standardized yet flexible financing options as well as strong supplier relationships as the secret for large fleet owners. According to Michiel van Ramesdonk, a VP Global Fleet Customer- at DLL, “To make financing more accessible, we tailor our financial solutions to their financial situation. As such, we are not just financing the equipment, but also offer advice about financial structures and more, recognizing the financial complexity that comes with international operations.”

The effective fleet management is about ideas, being able to monitor usage and effectively manage operations in order to cut down costs and increase the efficiency of the production. At DLL’s fleet centric approaches to asset financing means; they are continuously looking for some ways to develop solutions to provide such.

In 2014 to 2015, Stena Line implemented Fleet Management on terminal equipment in 15 port terminals. Working hand in hand with Terberg and DLL we have built a platform supporting our Dutch and UK terminal to take the next steps in continuous safe and efficient service and customer handling. This is according to Per Soholt, Stena Line Port and Terminals.

Deutsche Banks Move on Securitization

The Deutsche Bank has already sold the riskiest tranche among its portfolio on global trade finance, thereby experiencing a regulatory relief on his trade finance assets of US$3.5 billion.

The bank had a synthetic collaterised loan obligation (CLO) where they only sold the first loss trranche part of their portfolio to 7 European and American Investors at approximately 216 million USD. For the record, it was the largest securitization of trade finance assets ever.

Synthetic Versus Traditional CLOs

Traditional CLOs are when the portfolio of assets is divided in various risk segments (where the riskiest ones yield the highest returns) before being sold to potential investors. Synthetic CLO, on the other hand, is actually not funded. Therefore, the assets that were sold will be reflected on the balance sheet of Deutsche Bank; however, the risk is passed directly to the investors.

Deutsche Bank has reduced its risk-weighted assets on its entire portfolio. They did this by eliminating the percentage of their portfolio that is higher than the default percentage of their overall trade finance assets.

Guy Brooks, the head of distribution and credit solutions of Deutsche Bank, said during an interview, “US$3.5bn is the total portfolio, of which he first loss tranche loss is 0 to 6.5% of that, equating to approximately US$216mn. That’s that piece, it gives us significant RWA relief on the whole portfolio. We’ve kept the senior piece of the portfolio.”

The TRAFIN 2015-1 Transaction

He added that TRAFIN 2015-1 has a 5 year tenor, although his short-term trade finance assets are included in the sale which will be replenished every month.

The TRAFIN 2015-1 is actually the third synthetic CLO that the bank has launched based on the innovative structure that allows them to hedge a globally diverse trade finance portfolio.

Deutsche Bank’s Head of Trade Finance and Cash Management Corporates of Global Transaction banking, Michael Spiegel, said, “The TRAFIN programme is playing an important role in our ongoing risk and balance sheet management efforts at a competitive cost. Furthermore, as he programme evolves, expect it to further industrialise our distribution and hedging of trade finance risk.”

What Happens to Risky Tranches?

More often than not, risky tranches are sold to investors who love to take risks. However, in this case, they include hedge funds, one insurance company, family offices, and pension funds. This actually shows how traditionally risk-averse investors trust the trade finance assets.

“On the whole, insurance companies and pension funds put the bulk of their money in low-risk investments. But they’ll have a segment to look at longer dated higher yielding assets, with the added advantage of this particular transaction being that the underlying asset of trade finance has historically low default rates, non-correlation and offers good diversity away from other traditional debt instruments. Whilst they want a bit of yield, they like the fact that it’s a lower-risk asset class,” Guy Brooks explained further.

The bank still plans to utilize the platform again in the future in order to lessen RWA and manage their trade finance business more effectively. Other users that use trade finance securitization are Citi, Standard Chartered, and Santander.

Why Trade with xForex?

xForex, an innovative international company, has been created by Forex dealers and financial experts. It has established a unique online trading platform for foreign currency trading. In just a span of 2 years, the company was able to expand and quickly take care of its increasing number of clients. Currently, they have worked in 140 countries all over the world, hiring hundreds of staffs and employees. They have offices in  major financial centers worldwide.

The popular online brokerage firm, xForex, introduced new features for its clients. Licensed and regulated by CySEC, they provide traders new promotions that aim to improve their client’s trading experience. Having the same motto, the online brokerage firm had included two bonus features to its profile, which are the: First Deposit Bonus and Account Verification Bonus.

The First Deposit Bonus

The First Deposit Bonus is an online trading feature that aims at giving new clients with an extra trading benefit. This feature can be enjoyed by first time users who are depositing funds into the xForex. Each of these new clients would receive additional funding into their trading account, which is in accordance with the amount of their first deposit. Thus, those who deposit between $100 to $249 would get a 20 percent bonus; depositors of $250 to 499 would get a 30 percent bonus; and so on.

The maximum bonus that they will be giving away on this First Deposit Bonus feature is 60 percent. It is only available for clients whose initial deposits are from $5,000 to $9,999. Those who wish to deposit over the $10,000 mark, on the other hand, are offered customized bonuses by xForex.

The Account Verification Bonus

Aside from the company’s welcome bonuses, xForex also gives away Account Verification Bonuses. While this sounds very unusual to you, it is actually a very smart move in order to influence online traders to comply with the legal obligations that are related to trading online. This type of bonus feature only applies to those who verify their accounts. The broker, in return, will give their clients an extra $25 cash bonus.

Why xForex?

In addition to their bonus features, xForex offers a user-friendly platform. You only need a stable internet connection to enable you to trade from any locations. All you have to do is to open a web browser and log in to the site. They also offer tutorials through their research tools for you to have heads upon how to trade online.

IFC Invests in Fullerton Myanmar

The International Finance Corporation (IFC), a member of the US-based World Bank Group, announced its recent equity investment of 1.2 million USD in Fullerton Finance Company Limited in Myanmar. Fullerton Finance is a micro-financing institution (MFI) that lends to micro-, small- and medium- sized enterprises (MSMEs), as well as low-income individuals living in Myanmar. The IFC acquired about 15% of the equity in the MFI that plans to utilize the investment for expansion of its lending activity in the country.

The global director for IFC financial institution group, Marcos Brujis, said, “It is important for microfinance institutions to be well capitalized, creating a strong foundation fro the necessary investment in risk management systems, staff, and product development in order to provide a full menu of products and services to underserved segments of the market.”

“We welcome IFC’s investment as Fullerton Myanmar continues its strong growth momentum. As we build a sustainable business, we are looking to help our customers grow their own enterprises. Fullerton Myanmar remains focused on adopting industry best practices and using modern technology to efficiently reach urban and rural customers in Myanmar,” says Gan Chee Yen, the chief executive officer of Fullerton Financial Holdings.

Per 2014 data, IFC reported total assets of about 84.1 billion USD with net income 1.48 billion USD and return on investments of 1.8 percent. The IFC aims to contribute in strengthening the infrastructure and private sectors in Myanmar. They have expressed their support in the goal of the government of Myanmar in the expansion of financial inclusion from only 30 percent last year to 70 percent in 2020. Unfortunately, the financial information of Capital Diamond Star Group and Fullerton Myanmar isn’t available as of the moment.

Fullerton Financial Holdings have reported 12.6 billion USD in outstanding loans, 9.7 billion USD in deposits, and 5.4% in return on equity as of 2014.

Oliver Duff Leaves HSBC

Oliver Duff, the head of European capital financing for HSBC Holdings Plc, left the bank and was said to be launching a new senior loan fund, according to Reuters, citing senior banking sources.

Duff, who was with HSBC since 2006, helped the bank establish its leveraged financing platform and boost its profile in the sub-investment-grade leveraged loans. The bank has since then created a solid foundation for the global leveraged finance market in Asia and created a high yield loan team in Europe about 5 years ago.

Duff was first the global head of loan syndication and has been promoted to global head of leveraged finance in 2009. He then became the head of capital financing for Europe last year, where he reported to Spencer Lake, the global head of capital financing in HSBC’s global banking and markets division.

He was previously the loan syndicate team for Morgan Stanley in 2006. Before that, he was employed at Goldman Sachs for 6 years and started his career in the industry in 1994 with Bankers Trust.

What Happens after Duff’s Departure

Duff’s departure will lead to management changes in the division. Russell Schofield-Bezer, the current head of European debt capital markets for HSBC, is expected to assume Duff’s position being the capital financing chief of Europe. Furthermore, Richard Jackson, a New York-based global head of leveraged and acquisition finance for HSBC, will take charge for the loan team of the bank.

Graham Tufts, on the other hand, will be the one running the leverage and acquisition finance for the EMEA region. Meanwhile, Tim Spray will be running the lender’s European loan syndicate. The head of corporate loan origination for the EMEA will be Romeet Shankardass and James Horsburgh.

HSBC Trading

As of 10:17 GMT December 4th, the shares of HSBC were currently down by 0.7 percent at 523.44p. As you may remember, HSBC stocks have fallen by  more than 14 percent since the beginning of the year and the market capitalization of the company is currently at £101.5 billion.

On the 28th of November 2015, the prediction reached a consensus amongst the 28 polled investment analysts that covered HSBC that the company will outperform the industry. The same consensus was reached and maintained since the 9th of September 2015 when the investment analysts improved from being “on hold”.

As of 11:17 GMT December 4, the share price of HSBC Holdings plc was at 524.00p.

President Jacob Zuma Put More Damage to the Economy

Because of one wrong decision, it is said that President Jacob Zuma has put the South African economy to a more damaging situation comparing it to the rise of the global financial crisis that took place in 2008. This is in line with the decision of the president to fire his current finance minister, Nhlanhla Nene.

As a result, South African’s rand has dropped to a new record. About 3 percent lower in the sell-off by most investors following the dismissal of Nhlanhla. The banks stocks also led to drop.

The firing of the current minister Nhlanhla Nene last Wednesday was in favour for David van Rooyen. This newly elected official is an unknown lawmaker. Thus, more investors are quite in doubt of doing another investment to the ailing economy given that its status is already unstable.

Nene is a veteran civil servant that has been serving the ministry for quite some time. He stood to lead the government spending in Africa’s most profit-making economy. The dismissed official has also ignited the sell-off in banks, which has now dropped to almost 20 percent since Thursday.

A lot of economist has been questioning the ability of the new finance minister regarding its ability to work with the economy. If he can make the economy steady given that, it is now on the verge of downfall. Prices of the commodity exports ranging from coal to gold are shaky and that the public spending is getting out of control.

Cratos Capital equity analyst Greg Davies said, “Markets don’t like uncertainty”. He also added that whom president Zuma dismissed is someone that has been a credible minister when it comes to marketing. Nhlanhla Nene was fired without any given explanation and was replaced by someone who seems to have no idea or enough background about the work of a finance minister.

As of 1300 GMT the rand hit 2.8 percent lower compared to the dollar, which is around 15.8900, is edging back to the crucial 16.00 level after some time of recovery. Regardless of all the happenings, the central bank told the Reuters that it will still pursue and hold its monetary policy committee meeting this coming January as scheduled.

However, the analysts have speculated that the bank may call an early meeting than scheduled in order to protect the rate of the rand. The bank has reached the target rate twice this year at the same month to 6.25 percent. The current standing of the rand compared to dollar is quite challenging but they are still trying to manage everything.

As the new finance minister took place, more and more investors are in doubt of his capabilities. The local investors as well as the foreign ones are having these thoughts. The fund manager from Korner Perspective even said, “If you were going to design a terrible period to fire a minister, this is the perfect time. It is a real tragedy”.

Investors Charged with Hidden Fees

About 600 companies were charged with $20 billion in hidden fees by private equity firms, according to a recent academic research.

Oxford University and Frankfurt School of Finance & Management academic says those portfolio company fees were charged to companies in the US that have a total value of about $1.1 trillion. Researchers say that for the past few years, the total fees were $16 billion; which amounts to $20 billion with inflation.

The “monitoring” and “transaction” fees were agreed upon by the private equity firms and the company managers. While investors knew these types of fees, they don’t exactly negotiate even the smallest details.

“These fees are effectively hidden from investors. Investors usually don’t see these fees and don’t know how much they are paying,” Ludovic Phalippou, an associate professor at Oxford University, said during an interview.

Today, private equity firms are pressured to be more transparent about the fees they’re charging their investors. In May 2014, the SEC found illegal fees at more than 50% of the private firms they’ve evaluated. Among them is the Blackstone Group LP that agreed to pay about $39 million to SEC last October to settle its penalties on their fee practices. KKR & Co., on the other hand, paid about $30 million in June for its wrong allocation of expenses. A group of US state and city treasures wrote to SEC in July asking for private equity firms to be transparent on the fees they charge.

“As long as there is not any transparency it will be difficult to track these. A lot of people are frustrated with that.” Josvan Gisbergen, a senior portfolio manager of Achmea, said during an interview.

Private equity firms keep a part of the fees in addition to management fees and profit shares that are charged to investors. Some of these fees were given back to investors in private equity funds, while the rest are kept by dealmakers. The refund is made through the reduction of management fees charged to investors.

Some firms charge company fees to investors that equal to over 5% of the total value of the enterprise, the report says. Some of the fees are even puzzling. When KKR and Bain Capital LLC purchased HCA Holdings Inc. for $33 billion last 2006, a fee of $29 million was paid to the Frist Family, the founders of the company.

The spokesperson for the private equity firms declined to comment further on the issue.

Forex Trader Files Complaint Against Citi for Wrongful Dismissal

A former citigroup trader has filed a complaint against a bank in Singapore after she has been fired because of alleged connivance happening between her and a colleague which involves rigging the currency market.

Ms. Tian Yuhui was fired by the bank she is connected with after her four month’s maternity leave. She is suing the bank for the loss of income, deferred cash awards and stocks and for her to be reinstated in her job. This information is all noted in a lawsuit which was filed last August in the higher court in Singapore. Also, the former trader is asking the Citicorp Investment Bank (Singapore), the banks local unit to withdraw “adverse notifications” that was sent to the regulators.

Last October, the Citigroup filed a defence stating that they are entitled to terminate the currency spot options trader last May. Last year, during the internal investigation, they have uncovered five chat conversations from the year 2011 to 2013. These chats involve Ms. Tian and a Japanese colleague according to the court papers. The claims that the chats reveal Ms. Tian’s intention to trade with a view to affect or manipulate the US dollar-Japanese Yen spot price around 3pm Tokyo fix, a key currency market benchmark. The dollar-yen is a major currency in the US about $5.3 trillion- a-day (S$7.6 trillion-a-day) foreign exchange market.

Wong Siew Hong, the lawyer of Ms. Tian said that Ms. Tian has been unfairly dismissed without further notice.

There will be an upcoming closed hearing that is set in Dec. 17. For the years, banks have paid out more than US$10 billion which serve as a fines resulting to the scandal involving the alleged currency rigging with a pending criminal investigations in the US and Britain. Over the last 2 years, there have been at least 30 traders from different banks that were fired, suspended or put on leave since the scandal take place.

According to court papers, some of the chats includes “You are the best,” Ms Tian told her Japanese colleague right after he told her that he placed “fake bid” to defend the dollar-yen spot rate at 84.01. Ms Tian also told him to “push the fix”. The Japanese trader is also dismissed from work according to court papers.

With all these allegations, Ms. Tian said that it’s just a matter of miscommunication or wrong choice of words. The word choices may not be appropriate and has given the wrong impression. She also said that she did not tell the Japanese trader to place a fake bid and that the chats only reflect “common practice” of entering a bid order, and later withdrawing it. Ms. Tian was paid $18,900 a month. According to the court papers, Ms. Tian believes that her duty was to generate income for Citigroup.

Going Abroad? Know your Conversion Charges

Are you planning to have a vacation in Bangkok? Wondering how to carry cash? Well, cash isn’t always advisable to carry around. Aside from that, credit or debit cards are expensive to use because you’d get charged for conversion fees; note that the exchange rate is based on the day the charge slip will reach the bank. Thus, if rupee weakens during that time, you would have to pay more. The best option for you to avoid huge fees is to get a pre-paid Forex card because it allows you to secure the exchange rate. However, if you use it in a currency that is different from what you’ve loaded, then you are subject to conversion fees.

The One Currency Card

The One Currency Card was recently launched by Thomas Cook India in collaboration with MasterCard Worldwide. It is a pre-paid travel card with no currency conversion fees. The card is pegged to the dollar and there is no conversion fee if you use it in any currency, aside from ATM withdrawals where you’ll be charged with $4 each transaction.

According to the chief operating officer (foreign exchange) and head (visas) of the Thomas Cook, India, Mr. Mahesh Iyer, “As long as customers use it to swipe at point-of-sales terminals, there is no conversion charge, irrespective of which country they use it in.”

Take for example, if you’ve loaded $200 on the card and use it while traveling to Dubai. If the currency conversion rate of 3.67 dirhams to dollar, the value on the card would be 734 dirhams without conversion fees. But if conversion fees are applied, the value would range from 700 to 710 dirhams.

On pre-paid Forex cards, the conversion charges range between three and four per cent. While in case of debit or credit cards, it is 4.5-5 per cent. In case of cash, banks typically charge 1.5-2 per cent for conversion,” Iyer added.

Note that the currency exchange rates that are offered by banks and money changers change depending on the charges.

Authorized Dealers

In case there are authorized dealers, the rates would vary according to whether you want to purchase cash, pre-paid cards, or travellers’ cheques. You can get better rates with travel card compared to cash. However, the rate varies depending on whether you’re an individual or corporate traveller.

Adhil Shetty, the CEO and co-founder of BankBazaar.com, said, “Every institution sets its own prevailing rate based on what premium they want to charge. So, travellers must check two or three outlets before buying. While all rates are broadly based on RBI’s reference rate, they need not equal to the RBI rate.”

Multiple Currency Cards

Although multi-currency cards may address the problem to some extent, you need to determine which currencies are loaded to it. More often than not, banks would provide 8 to 10 of the most popular currencies, but they may not have the currencies that you need.

Vikas mangla, the executive and vice president and ehad of emerging corporate group at Induslnd Bank, charges for both single and multi-currency forex cards are more or less the same.