Dear Valor FX Investors,
As many of you are aware, we have had some discrepancies which occurred on the Valor FX accounts last week between our reference accounts at Synergy FX, and our Valor FX accounts at our other brokers and any external accounts being traded.
This was unfortunately due to some technical problems encountered at Synergy FX where all of our master accounts trade. The trader of Valor FX, for two days in a row ran in to problems where he could not close open trades (rejected by Synergy FX’s trade server). We also witnessed very extreme price gapping on the exclusive feed at Synergy FX that we trade on before and after these server problems.
After an investigation by Synergy FX’s technical team, they found that their bridge provider PrimeXM (i.e. the group that connect their MT4 platform to their liquidity source), encountered an outage at their NYX facility as their ISP had a major DDOS attack on the datacenter.
PrimeXM is a major bridge provider to many brokers, and many others experienced the same problems. The result was that Synergy’s feed froze from 15-45 mins on each occurrence. It took close to 1 hour before the problem was corrected as Synergy FX was able to map their pairs to a redundancy feed in London.
Our only program that had open trades was Valor FX - all others were flat. With the downage, and the price gapping, and of course (never fails) the governor of the Bank of England speaking during this time, markets were very volatile, and caused some unnecessary losses on the Valor FX trading account.
The trader immediately noticed this and documented this and made screen captures during the time. Thankfully Synergy FX was very understanding and apologetic from the problems caused, so we did not need to challenge them on this. We have as of last Friday with their tech and accounting team went through all of the trades one by one, and had them corrected to close at their proper targets.
The good news from this is that all clients at Synergy FX had the trades corrected from the errors on their accounts. This is why we saw our reference account gain an extra 3.4% without any new trades being entered. The bad news is that those trading at our other brokers (our other MAMs, and any external clients) realized the losses on their accounts, as they were copied from our master accounts at Synergy, but were not able to have the error trades corrected. We mentioned this to Synergy of course, and not only are they not liable for trades being copied to other brokers; it would be illegal for them to refund any losses there.
This means that most of our other brokers aside from Synergy FX, and all of our single external reference accounts, will have approximately a 3.x% - 4.x% difference on Valor FX from our primary reference account at Synergy FX this month.
You can view our “official reference accounts” that we report performance from, from the following links.
Official Reference Account for Nov 1 – Feb 1: http://www.myfxbook.com/members/ManagedFXHub/valor-fx-nov-2013-forward/795037
Official Reference Account for Feb 1 Forward (our live account we funded inside the MAM at Synergy FX): http://www.myfxbook.com/members/ManagedFXHub/valor-fx/845264
Valor FX is unfortunately down this month (regardless of the errors); having its first negative month since implementing recent changes. However, this is unfortunately magnified at any brokerage other than Synergy FX. The ValorFX guys are working this week to hopefully safely chip away the DD before next month begins.
This is of course always one of the risks when trading at multiple locations. Thankfully it is a very rare one, and we have not had a tech problem of this nature in over 1.5 years. Our duplicator is actually quite “smart” in that it detects problems like this and stops trading when they are encountered (no heartbeat between master and slave). The only vulnerability is if there are open trades when a broker problem occurs, such as what we experienced here. There is simply no way around that.
This is of course why we structured one brokerage (SynergyFX) this year to be our Primary Brokerage. Clients are always MUCH better off from a safety stand point to join our primary MAMs directly at Synergy FX in Australia. Although we realize that this is not an option for everyone, we strongly recommend this.
This is a perfect example of why we recommend this - in which case trades were corrected by our primary brokerage, but not on external accounts. Again, while this is a very very rare occurrence, in our opinion it certainly makes it worthwhile.
Please accept our sincere apologies for this. We wanted to get this update out as it will explain to you why there will be a 3-4% discrepancy between our reference account at Synergy FX, and the others MAMs or external accounts come month end.
Those who after reading this are interested in moving their account to Synergy FX, please contact us and we will gladly help facilitate the move, as we think it is worthwhile. However please understand the rare nature of this if you are contemplating the move. So while we cannot guarantee that it will never happen again, it should be very rare, and we hope to not encounter an issue like this again for a long long time (preferably – ever again).
That being said, we believe Valor FX will get back in black fairly quickly, starting early next month. And lastly, of course all high water marks are being tracked across the board at all our brokers, but, we have spoke to trader and negotiated a 20% performance fee for life to those who were effected, after the high water marks have been met.
This is quite a significant reduction vs. the normal 35% charged, and we believe it will make a significant impact financially for those who plan to invest with the strategy long-term.
If you are an advisor, please forward this update to your clients so they are aware of the cause of the discrepancy, and also of the reduction in performance fee going forward. Please feel free to contact us at any time, and we will gladly discuss any of this in more detail, or work to plan with you for any changes on your account(s) going forward should you wish to.
Managed Forex Hub