The pros make it look hard

One of the great pleasures of watching a true professional in any field is how they can make a difficult task look easy. This is not the case for currency traders, as evidenced by the performance of six widely followed indices for currency only money managers:

• The Barclay Currency Traders Index (CTI)

• The BTOP FX Index

• The Center for International Securities and Derivatives Markets (CISDM) asset-weighted index

• The CISDM equal-weighted index

• The Parker index

• The AFX index

With the very prominent exception of the CISDM equal weighted index’s performance over the 24 month period preceding the time of this writing, the performance of these indices is either negative or insignificantly positive.

Currency index returns
3-Mo 2006 YTD 12-Mo 24-Mo 36-Mo
CISDM (Asset) -2.92% -5.40% -5.04% -1.13% 1.16%
BTOP FX NA -3.78% -5.04% -1.13% 1.16%
AFX 0.07% -2.81% -3.18% -2.73% -3.93%
Barclay CTI NA -1.53% -1.21% 2.36% NA
Parker -1.34% -1.34% -0.72% -2.80% -0.90%
CISDM (Equal) 1.71% -0.44% 0.25% 7.82% 3.12%

If the pros have had such a difficult time in the market, how can individual traders hope to succeed?