CEO Monthly August 2017

32 CEO MONTHLY / AUGUST 2017 , like to be part of the crowd. The ‘fear of missing out’, causes people to engage in trades that they may not fully understand, but don’t want to be left behind. Mainly, this is due to a lack of confidence in one’s own ability. By contrast, the contrarian trader, a much rarer breed, needs to be confident in their understanding of why markets are moving in a certain way and to know when the markets are at extremes in terms of pricing as well as positioning. Where it makes sense, I have always traded in a contrarian manner and have spent a lifetime creating models and methods to help me to constantly improve, refine and upgrade the trading strategies that we employ as a firm. The great joy of being involved in Forex - is the need to constantly learn the lessons the market gives you, take them on board - and then move on. Creativity, resilience and a desire to continue to learn and improve are critical traits. A primary reason for setting up Mercury Forex, was the ability to create an environment that I wanted to work in. Initially, this was about stepping outside of a corporate environment, where The business of currency tradingmeans different things to different people; whether it’s the central banker, corporate treasurer, international investor, hedge fundmanager, personal trader or holidaymaker. Each can be affected bymovement in exchange rates. The firmwas pleased to receive two awards: AssetManagement CEOof the Year – Switzerland and the Best in FXTrade Solutions – Switzerland awards. CEO, John F.C. Birkins ofMercury Forex AG explainsmore in this guest article. A Continuing Success Story As a product, Foreign Exchange, is not an asset like equities or bonds, or a money market instrument such as a deposit or loan, but has characteristics of both and is critical to the effective functioning of global commerce. By being a relative price of one currency against another, used by people for their transactional needs, hedging needs and speculative aspirations, the foreign exchange market creates opportunities for those who embrace the breadth of the market and search diligently for opportunities. I created Mercury Forex AG to do exactly that. Since the dawn of my trading career, in 1977 as a trainee at the Scandinavian Bank London, the world of foreign exchange has fascinated me and continued to do so, through increasingly responsible roles at Berliner Bank AG, UBS London and Credit Suisse London. In 1993 - I felt a strong desire to step outside of the corporate world of management and politics - and to focus purely on trading initially investing my own money alongside a small core group of clients. Over time, Mercury Forex has grown to become a very well respected asset manager in the industry, with a much broader range of investors and significant assets under management. The business has grown into a global enterprise, with representatives in Europe and the United States and a support team primarily based in Switzerland. After all, what Mercury Forex has consistently provided over its 23 years of trading is a valuable commodity: Alpha. Whilst many alternative asset managers have succeeded in providing expensive exposure to benchmarked returns, the creation of excess return, or alpha, requires a different mindset. Mercury Forex has delivered an average gross annualised return of 16.6% over its trading life, with low volatility and controlled drawdowns. Importantly, the correlation to the performance of equities and bonds - over the long- term - is essentially zero. That means that Mercury Forex creates excess returns, irrespective of whether stocks or bonds are themselves rising or falling. This makes investing in Mercury Forex extremely attractive as part of a balanced investment portfolio. I am particularly proud of the consistency of returns, which are testament to the way in which Mercury Forex operates. I am often asked how I run a successful business, juggling management, a broad group of stakeholders, being strategic with my decisions for the development of the business whilst creating consistent alpha over a long period of time. The answer is that Mercury Forex remains true to the core values that we founded this business upon - confidence, environment, patience, delegation, communication and focus. In terms of focus, we don’t try to be ‘all things to all people’. Mercury Forex applies a very strict risk management approach, typically not risking more than 0.3% on any one trading idea and trading only the G7 currencies. However, this still gives us plenty of opportunity within those 28 currency pairs to produce alpha. I also realised from my early trading experiences - that traders tend to fall into two camps - the followers and the contrarians. The followers make up a far larger number of the trading population; for most part people generally GCE17037