I just released the Top 10 CTAs report for April.  If you're not familiar with the report, it identifies the top 10 account management firms in the world and their return on revenue for their last reporting month as well as year-to-date.  The report is divided into two sections, listing the top ten CTAs managing more than $10 million and the top ten managing less than $10 million.

Wealth Builder FX, a Hong Kong-based CTA, is outdistancing everyone in the field.  Although their return on investment for April was only 3.0%, their YTD numbers are an impressive 40.27%.  Most of that due to the fact that they returned 26.0% in March.  Wealth Builder has managed to achieve these numbers while only risking 1%-2% of any client's account at any one time and never using more than 3-to-1 leverage.

The company manages a little over $5.1 million in their Forex investment program with a minimum investment of $50,000. 

Like Niche Players, Early Risers are relatively new to the Forex game. Typically these are companies that also rank lower on the maturity scale, but which tend to provide a greater range of services than Niche Players. They may not have a significant customer base yet however, they are positioned for long-term success through the depth of service they provide.

These companies are generally very well funded and, in a lot of cases, may be subsidiaries of larger, more substantial financial institutions. For example, national banks, which historically have had foreign currency exchange departments serving institutional customers, are beginning to dip their toes in retail Forex waters. Since national banks are not brokers or CTAs however, they are not subject to Commodity Futures Trading Commission (CFTC) regulations.  They are governed by the regulations of the Office of the Comptroller of the Currency (OCC).

CitiFX Pro is an example of a national bank launching a retail Forex business. CitiPro's retail Forex business is a part of Citi Foreign Exchange, which is housed by the Fixed Income Division of Citi Markets & Banking. The legal entity for CitiPro's business is Citibank, NA.   The bank services a very broad range of institutional clients, including real money managers, hedge funds, corporations and other banks.  The CitiFX Pro platform now gives Citibank the ability to service the retail Forex space as well. They are rolling CitiFX Pro out globally as a retail Forex business.  A cursory review of their website reveals that CitiFX Pro is a potential Niche Player (or Maven, which I'll talk about tomorrow) offering trading, but little in the way of ancillary services.

An example of a more traditional Early Riser, providing trading, training, analysis, and other services to a retail client-base, might be TradeView FX. The company, founded in 2007 as a division of the Rosenthal Collins Group, is now a division of IKON Global Markets.  They are experiencing a meteoric rise in the Forex world due to smart marketing, excellent partner programs, and an experienced staff.  Still, TradeView is lower on the Level of Maturity scale, even though it is high on the Range of Services scale; placing it perfectly in the Early Riser sector of our DataInsight Market Profile.

Tomorrow, what is a Maven?

If you have been following along, remember that we're trying to illustrate that asking the question "Who is the best broker?" should be revised to "Who is the best broker for me?"   Read my previous post, DataInsight Broker Evaluation.

Within the DataInsight Market Profile, Niche Players are companies which rank lower on both the Level of Maturity and Range of Services scale. Typically, these companies are relatively new in the market serve a smaller customer base.

Instead of the next big company, there are a myriad of small companies with simple ideas that fill the Forex landscape. They don't try to be all things to all people but rather, they strive to do one thing extremely well.  Niche players aren't bad choices because they are young or small.  Sometimes these companies make a strategic decision to be a niche player to serve a different type of client - fill a different need.  Niche players may just be the right fit for you.

Think about this. Do you really need a company that provides trading, training, market and technical analysis, trading systems, trading signals, and managed accounts? It doesn't make a lot of sense to declare that Company A is a better broker than Company B simply because it is bigger, older, or more popular. Yet, there are dozens of Top Ten broker rankings that only consider the size of a company or the number of website visits they receive daily.

Let's say, for example, that Broker A is a niche player serving 1,000 clients with an average account size of $100,000. Broker B, on the other hand, is a full service company with 20,000 customers with an average account size of $5,000. You can see how these companies fill a different need and might appeal to a different type of trader.

Again, what we illustrate with our Market Profile Sectors is that Forex companies fit an identifiable profile and, once you determine which type of broker profile suits your needs, then you are more likely to find a broker that meets your personal requirements.  Bigger is not necessarily better.

Tomorrow, Early Risers.