Currency Management


1. The objectives of professional currency management

The principal problem for currency management is that currencies are particularly difficult to forecast. Of the popular and widely used methods (fundamental analysis, technical analysis, as well as quantitative analysis), only technical analysis is really geared towards delivering price forecasts.
Important to note in this context is that, whilst these analyses are neatly formulated, the forecasts are not verifiable. In most cases they are vague and therefore not easily applicable, i.e. tradable. For this reason, the majority of these forecast are simply not assessed ex-post.


2. Preconditions for currency management

To assure long-term success in currency management, a number of preconditions must be satisfied:

a) Verifiability of the trading strategy (transparency)

b) The historical test

c) Diversification

d) Volume limitations


3. Currency Management at Cognitrend:

a) Introduction

b) Signals only

c) Trading model and training

d) Currency Overlay