In this piece, we will be taking a look at a managed account company called Blue Trading.
This is a managed account service which means that they trade accounts for their clients at a range of brokers and exchanges.
In this piece, we will take a look at their services including their account options, their regulation and reputation. We will also take a look at their technology and trading strategies.
Let’s jump in.
It was started in 2012 and was founded by Richard Anderson. At first, their services were open to private and institutional investors.
However, in 2016 they have opened their books to retail traders and claim to offer a diversified and modern approach with a wide array of trading instruments. The company is based in Japan at 6-2-30 Roppongi, Roppongi Hills Tower, Minato-ku, Tokyo, 100-0032. We could not verify this independently.
They state that the team has over 40 years of experience in a number of different trading strategies in the Forex field. They also claim to use these strategies and apply them to other assets such as cryptocurrencies and commodities.
We took at look at some of the linkedin profiles of the team members and they appeared to be present yet were sparse on details.
Registration and Accounts
If you would like to open an account with them then you will need to decide on what account type you would like. They have two account levels for you to choose from. These are the standard account and the VIP account.
The standard account requires the trader to invest a minimum of 3,000 EUR and the VIP account requires a minimum of 10,000 EUR. Each of these accounts come with different benefits and fee structures. You can see a more detailed breakdown below.
Account Options and Breakdown
If you decided to start on the standard account then you always have the chance of increasing the level of your investment to the VIP stage. This will allow you to judge how well the returns are working before you commit your extra capital.
Once you have decided on the account you want, you will have to register with them. Unlike some cryptocurrency exchanges, they will require you to complete their full KYC checks. This is in order to combat any money laundering.
Hence, if you wanted to start your account at Blue Trading you would need to send them a proof of identity as well as a proof of address. The former can be something like a passport copy and the latter could be a utility bill.
Then, once they have verified you as a trader, you can fund your account. The funds will be deposited with their bank Brokerage Liquidity provider.
How Does it Work?
Given that they runs a managed account company, they manage trading accounts on behalf of their clients. These trading accounts are held at a number of forex brokers and international cryptocurrency exchanges.
These accounts are managed as “PAMM” accounts which means that they are controlled by a master trading console. In other words, once you have set up your account at the exchanges and brokers, they will link up with your account and execute their trades in a central location through a central account.
With this system, they are able to trade such a large collection of accounts at once without aggregating the accounts. This is also an effective way of spreading their trading risk across a range of brokers and exchanges in order to limit exposure to only one broker.
How the Master Controller and PAMM Account Works
On the chosen master trading platform, they have access to several large liquidity providers. These are relatively well known liquidity providers and their order books are accessed through the use of an API network.
Once you have funded your account, then you will be given access to your own personal dashboard. This will allow you to monitor your trades and performance 24 hours a day. This will show all eligible forex trades that have been completed.
They do however note that their crypto strategies will not be documented. This is because they have not being able to connect their client trading platform with the crypto exchanges as of yet.
Fund Safety and Regulation
When it comes to using any sort of trading service it is important to take a look at their regulations. Hence, we decided to take a look into their regulations and a jurisdiction.
In the case of Blue Trading, they are not regulated by agencies such as BaFin in Germany or the FCA in the UK. This means that they are not allowed to take traders from this jurisdiction. It is perhaps prudent to confirm with your local regulator the status of such managed account services.
They claims to be a member of the Financial Commission as well as the Foreign Exchange Global Committee. These memberships have allowed them to get their access to the numerous liquidity providers. You can read more about their membership in their fund safety page.
List of Exchanges and Liquidity Providers
In terms of the fund safety, all of the funds that you send will be directly deposited into their liquidity brokerage system. These are stored in the accounts of the liquidity providers. They are merely given control over your respective account with the PAMM system.
Funding and Withdrawals
If you have decided that you are comfortable with your due diligence and you have created your account and completed their KYC checks, then you can fund your account. They accept payments in the form of cryptocurrency as well as wire payments.
Unfortunately, they do not accept credit card payments due to the fees that are charged on these transactions. It is also important to note that if you are funding your account via wire you can only send funds from an account that is in your name. They do not accept deposits from third party accounts.
Once your account has been approved you will head over to the deposit section and you will be given the wiring instructions. If you choose to fund your account in Bitcoin then you will be given the Bitcoin address and QR code.
Given that the account is an international account, the transfer should take at least 3-5 business days if it was via wire. If it is via cryptocurrency then it is almost instantaneous.
When it comes to withdrawals, this can also be done via wire / crypto. There are no restrictions on these withdrawals and they will be processed within one business day from the request. However, you are only allowed to make one withdrawal request per month.
There have been complaints from some users on other forums about transfers taking longer than usual. This was slightly disconcerting to us.
Given that they operate a managed account solution, they will charge what are called “performance fees”. This is a fee structure that is used by hedge funds and other money managers.
It is a fee that is charged on the performance in the account. So, for example, in the case of their standard account, they charge a 18% performance fee. This means that for all of the returns that are generated on your account, they will take an 18% cut.
Taking a look at a numerical example, assume that in the first month they make a return of 10% on your 3,000 initial investment. This means that you will have earned 300 EUR in performance. They will take 18% of that or 54 EUR.
Unlike other hedge funds and money managers, Blue Trading does not seem to charge a monthly maintenance fee. This is a great fee structure as it aligns the incentives of the firm with those of your account returns. They will only get rewards for the money that they earn.
In terms of this fee, if you go for the VIP account then the performance fee will drop to 12%. Hence, you will need to consider the trade off between a higher investment amount and a lower fee. Of course, you can always upgrade the account should you wish to try it out.
They seem to have a few options for you to reach them. Although their head office is located in Japan, they seem to have satellite offices at a number of other local jurisdiction in Europe, the Middle East and Africa.
They claim to offer 24-hour service 5 days a week and there are number of options for you to reach out to them. Firstly, you could reach out to them on their live chat option. This is available on every page of their website.
If they are unable to attend to your query from the live chat then you can always email them. They list these emails on their contact page. We reached out to them on a separate matter and they responded promptly to our email.
They also have a few phone numbers that you can call for their local offices which are listed on their contact page. We tried calling their main office in Japan but were unable to get through.
On the face of it, Blue Trading looks as if it could be an attractive solution for those traders looking for a managed account provider. You could study their past performance on external sites such as MyFXBook which they have linked to.
However, their lack of regulation in Europe, the US or the UK is slightly troubling. This means that any investors that choose to place their funds with them do not have the protections that are usually afforded.
While they list numbers and addresses, we could not independently verify these claims. We tried to calling a few of these numbers and they were not answering them. If they have changed their numbers they should update their contact page.
We would also suggest that readers reach out to current users of the platform to make sure that they are honoring their withdrawal commitments and are still remaining in communication.
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