Nexus

​​Detailed monthly review of 5 Nexus hedge fund's segments: July 2020

Dear clients, we present to your attention a monthly overview of the five trading segments of the Nexus hedge fund with a detailed presentation.

• Venture capital investments: 12.4%
• Stock: 32.93%
• Forex: 34.19%
• Cryptocurrency: 63.34%
• Commodity market: 19.21%

On average, the Nexus hedge fund earned 32.41% last month.

Stay tuned for updates and the latest Nexus news.

​​How to get out of an unprofitable deal with minimal losses?

Trading on financial markets is not easy, although it promises high returns. Every trader knows that not all trades are profitable, however, if the position goes to the negative, it does not mean that the transaction was unsuccessful. Below, we will look at what to do if you find yourself in the wrong position, and how to get out of it with minimal losses and save your capital.

First, you should determine which trade should be considered profitable and which should not. If you clearly follow the rules of a tested and proven trading system and exit a stop loss trade, this trade can be considered profitable. If the position is opened thoughtlessly, but in the end you came out in profit, this transaction can not be called a successful one, even despite the positive result because if you open a position not according to the rules of the trading system, you risk incurring significant losses next time.

So, we found out that a profitable trade is one that is opened according to the rules of the trading system, and a losing position is one that is opened in violation of the rules or with complete disregard for them. So, what to do if you entered an unprofitable transaction and how to exit it with minimal losses for the deposit?

First, you need to clearly diagnose the problem: you need to understand on what basis the transaction was opened. For example, you made a mistake with your analysis and went against the trend, and now the price is going against you. Or you entered too much volume in the direction of the trend, but in the middle of the corridor, and now there are not enough funds in the account to withstand the pullback. Perhaps the position was opened without analysis, and then you made the situation worse.

Secondly, it is important to understand whether there is a chance that the price will go in your direction, and whether you can get out of the position at least to zero. To do this, make a technical and fundamental analysis, if after diagnosis and analysis you realize that you went against the trend at the very beginning of the opposite trend, sometimes the best way to reduce losses is to exit the deal immediately.

Averaging is another way to get out of a bad trade. This strategy is very risky, especially if there are few available funds on the account. However, if you can correctly calculate the volume of averaging and make sure that the money management rules do not overload the account and do not increase the risks, you can use this method.

After you exit a losing trade, the most important step is to analyze and work on errors. Now it is important to avoid such situations and learn to open only successful deals.

​​How to choose the best Forex strategy?

What is the best Forex strategy? There is no clear answer to this question, because each trader chooses a strategy for himself, taking into account his own personality. A trading strategy that has been underestimated by others may be suitable for you. Therefore, it is only through testing various approaches and strategies that you will be able to find the right one for you.

One of the key aspects to consider is how much time you can devote to trading. Below we have described various trading styles that have been widely used in recent years and are still a popular choice in the Forex market in 2020.

1. Scalping is short-term trades that open for a few minutes. The scalper aims to quickly make a profit of several points using tick charts.

2. Intraday trading - deals that remain open throughout the day, this eliminates the possibility of adverse effects of large impulses. These Forex strategies mean that trades can last only a few hours, and the timeframe can be set for one or two minutes.

3. Swing trading is a position held for several days in order to profit from short-term price formations.

To sum up, it is worth noting that Forex trading is a profitable trading direction that Nexus is developing. You can check and use your chosen strategy in the reliable and secure investment system of our hedge fund around the clock from Monday to Friday.

​​Factors affecting the price of gold

Of all precious metals, gold is valued as an investment and is usually purchased as a method of risk diversification, including using futures and derivatives. As in other markets, gold on the exchange is subject to significant volatility, but given the huge amount of gold produced during the year, trading spot metals is profitable because the price of it depends mainly on changes in demand, and not on changes in the annual volume of production. The price of gold is also influenced by other factors, such as:

Inflation
Inflation affects the price of gold, but not as much as one might expect. It is necessary to distinguish inflation, which does not cause an increase in the price of gold, from the one that stimulates it. The criterion is the trust of investors. If inflation accompanies a period of growth and optimism about the future, confidence levels are also likely to be very high, making gold a relatively unattractive investment. However, if too high inflation accompanies a low level of confidence, then we should expect a rapid increase in the price of gold.

The risk of global recession
A war or the threat of war is the most significant source of uncertainty for investors. Gold is best served as a safe investment at times when investors are very scared, in addition, the war is associated with a number of other factors that contribute to price increases, including excessive spending, money issuance, political instability and currency weakness.

Interest rate
Gold is sensitive to interest rates because it does not generate current income and is therefore highly sensitive to alternatives in the stock market that offer potential income, such as bonds or even dividend-paying stocks. As interest rates rise, the price of gold, which is not profitable, tends to decline and vice versa.

In conclusion, we note that, as a rule, fundamental analysts of the stock market monitor the financial statements of certain companies, and analysts in the gold market track the macroeconomic factors listed above to forecast prices.

​​The main types of hedging

In the modern world, an investor has powerful tools at his disposal that allow him to reliably protect himself from possible risks in securities transactions. So there are six popular types of hedging today:

1) Classic hedging
The essence of this insurance is based on the simultaneous opening of two positions: one-on the real stock market, and the second — on the futures market, this is a hedge against possible changes in the price of a particular asset.

2) Partial hedging
Hedging all or only part of the transaction (depending on the selected type), this method is a chance to reduce price risks to a minimum, and if you correctly implement a full hedge, you can eliminate all risks.

3) Anticipatory hedging
The main purpose is to protect yourself from risks long before the transaction is concluded. This is done by buying or selling a fixed-term contract in advance.

4) Selective hedging
This type of insurance allows you to build a flexible trading system and fully optimize your strategy in terms of profitability and risk. We remind you that transactions on the real and futures markets may differ in both volume and time of conclusion.

5) Cross-hedging
Here a "cross" transaction is made: in the real market - for one asset, and in the futures market — for another. For example, in the real market, you buy a block of shares in a company, and in the futures market - futures on the stock index.

6) Hedging (re-hedging) with options
Here we are talking about opening a position with the underlying asset for already open transactions with options, this reduces the risk of price changes for both the seller and the buyer. The cost of options may change over time, so be prepared to make corrective trades.

Choose a high-quality trading platform that best suits your criteria and entrust the choice of hedging type to Nexus professionals.

​​5 unique hedge fund strategies

Hedge funds use different strategies. Every fund manager is ready to say that their strategy is unique and cannot be compared with others. However, many of them can be grouped into certain categories based on the methods and results of hedge funds using the strategies presented below. This helps analysts and investors understand what outcome can be achieved with a specific action plan.

1. Aggressive growth
This strategy involves investing in stocks, which are expected to significantly accelerate the growth of profitability. Typically, rapid growth is expected for stocks with high and low price/earnings ratios, or without dividend payments.

2. Market timing
Distributes assets among different classes depending on the manager's view of economic development and market prospects. The focus of such a hedge fund's portfolio can focus on any of a variety of asset classes.

3. Investing in emerging markets
This strategy involves investing in emerging market debt, which is subject to higher inflation and is prone to volatile growth. Short positions are not allowed in many emerging markets, and therefore effective hedging is often not available.

4. A fund of multiple hedge funds
Mixing different strategies and asset classes aims to provide a more sustainable profit on long-term investment than any of the individual hedge funds. Earnings, risk and volatility can be controlled by mixing basic strategies and funds. The preservation of investment capital by such a fund is considered a top priority.

5. Using special situations
This strategy may consist of simultaneously buying the shares that the company is purchasing and selling the shares of the company that is making the purchase, in order to make a profit from the spread between the current market price and the final one. The fund can also use derivatives to improve the return profile and hedge interest rate risk or market risk.

Organizations often use only one traditional strategy, which they later regret because of the discrepancy between their expectations and the final result.

Nexus uses several approaches at the same time, individually selects strategies for each client, evaluating the opportunities available in the market at the moment and moving assets accordingly. Entrust your action plan to professionals.

​​Introducing our partner: Antares Advertising Broker

Dear customers, on June 23, 2020, the Nexus hedge fund transferred exclusive rights to promote its products and services to the Antares advertising broker.

Antares is an MLM distribution platform that professionally promotes venture capital firms, startups, and digital products.

This collaboration will provide Nexus with the opportunity to enter new markets and make our services accessible to everyone.

At the moment, registration of new customers is temporarily unavailable. Starting July 6, you will be able to register through our partner, at antares.trade. At the same time, the support of old Nexus customers will be carried out in the usual format through their personal account on the official website of the hedge fund: https://nexus.management/.

You can apply for registration after 06/07/2020 on the Antares website at the following link: https://antares.trade/personal/#register

​​The main types of investors in hedge funds

Investors who invest in hedge funds are quite heterogeneous in relation to the risk and duration of the investment period. In this article, we will look at the main types of Nexus investors who make investments.

The structure of the main investors in a hedge fund is as follows:

Individual investors. This type is the main reference point when building any activity of companies, including investment institutions because they are the most numerous clients.

Family funds. This is an investor or a group of investors whose main task is to provide funds for the future of children or grandchildren. The priority for a family fund is usually the reliability of investment and minimizing risks.

Non-profit organization. These organizations include charitable foundations and various public organizations that prefer hedge funds that bring a low but stable income.

Endowment-funds. These funds differ from conventional charitable foundations because they use investment income from the capital generated by donors rather than donations from donors.

Corporations. Private companies place available funds if they do not have investment projects with a profit higher than the profit of alternative investments.

Insurance companies. Such companies usually collect a large amount of financial assets, but their investments in hedge funds are not as large as they might be.

Financial consultants. Financial advisors themselves are not usually invested in hedge funds, but they help their managers prepare information and play the role of representing the interests of the investor.

To sum up, we can conclude that the hedge fund industry is diverse and offers a large number of investors some insurance against the risks that accompany their investments. Also, the presence of such investors as insurance companies and endowment funds in the list indicates sufficient stability of the Nexus hedge fund as an investment tool.

​​The aim of hedging

Insurance is designed to neutralize adverse fluctuations in market conditions for the hedger. The purpose of hedging is to transfer the risk of changes in the asset price from the hedger to the speculator.

Hedging can be complete or partial.
1) Full hedging completely eliminates the risk of losses for the hedger. Selling hedging consists of opening a short position on a futures contract. An investor resorts to this step if they plan to buy an asset on the spot market in the future.
2) In the case of a partial hedge, the investor is exposed to the underlying risk, which is related to the difference between the spot price and the futures price at the end of the hedge. For insurance, a contract is selected that expires later than the moment of making a spot transaction, where the beta value acts on the stock index, and when using a bond futures contract, the conversion rate is used.

Thus, the hedging process is quite complex, it insures against a variety of fluctuations in the market that can lead to price changes. With the help of a traditional Nexus hedge fund, the client acquires additional advantages that are associated with minimizing losses in the market, as well as with the possibility of additional earnings.

​​Insider trading is the forbidden fruit of the stock market

Everyone who has come across investments has heard of the term "Insider trading".

An insider is a shareholder of a company who owns at least 10 percent of the shares. As a rule, such shareholders are a kind of a managing centre and the head of the enterprise in one person.
Accordingly, these people have direct access to non-public information related to the company's activities. Until such information is disclosed, it is considered insider information.

Insider trading is the execution of transactions using the same "non-public" information. According to the legislation of most countries, it is forbidden to use it. But according to statistics provided by the SEC analytical centre, about 30 percent of all current stock market transactions are insider trading. One of the problems of preventing these transactions is the inability to prove that the trader used insider data, and not publicly available information for analysis.

If we talk about false insider information, it helps to manipulate markets with the help of major media and the Internet, which significantly affects the stock prices of companies. A false insider may be an incorrect interpretation or insufficient understanding of the statements of experts, politicians and company executives.

To sum up, we can say that insider trading is an important part of the stock market that needs to be understood, especially since in most countries its regulation has not yet been worked out. Insider transactions can be very lucrative, but they are illegal. In this case, the end does not justify the means.

​​A Stop Loss and a Take Profit

Exchange trading involves risks. Investors have come up with different ways to maximize profits and reduce losses. We would like to tell you about the two most popular.

In the market, it is possible to limit possible losses. To do this, you need to instruct the broker to sell shares when a certain level is reached. Such exchange orders (also called "orders" or "applications") are called Stop Losses and Take Profits.

What is a Stop Loss?

A Stop Loss is an order for a broker to automatically sell shares when the quotes fall to a certain level. A kind of loss limiter. The asset is sold automatically without the participation of the investor when the limit indicator is reached. It is very dangerous to trade on the market without using a Stop Loss. This financial instrument insured investors against a market crash during the COVID-19 pandemic. Many have managed to get rid of shares in the rapid fall of the markets and suffer less losses than other market participants.

What is a Take Profit?

Market trends and moods are created by many market participants. As a result, there may be an overestimation of prices that does not correspond to the asset. Most often, after this moment, the price reverts to the previous values. There is a Take Profit for selling a revalued asset. This tool allows you to automatically sell a position when a certain level is reached.

Nexus is a classic hedge fund that uses fundamental analysis and understands when an asset is undervalued or the price is inflated. The fund evaluates the financial performance of assets and uses incorrect market trends and moods to generate profit.

​​How the stock exchange works

History

The first exchanges appeared in Europe in the 15th century. Merchants regularly gathered in the main square of Bruges and sold their goods. At first, exchanges were universal, they traded goods and securities. Exchanges that traded only securities appeared in Antwerp and Lyon in the 16th century.

What is the stock market and stock exchange

The stock market sells and buys securities: shares, bonds and units of exchange-traded funds. In order to avoid fraud and unfair play, the exchange develops rules for trading securities and guarantees the execution of transactions.

Why do they issue securities

Companies issue stocks or bonds because they need money for production and development. If an investor buys shares, he becomes the owner of a piece of the company's business: he can participate in the shareholders' meetings and receive dividends.

Advantages of stock exchanges

Exchanges ensure transparency of companies for investors, because issuers must provide financial statements and comply with certain rules to be allowed to trade. Stock exchanges organize trades and maintain fair pricing. Exchanges guarantee the execution of transactions and include and exclude securities in the quotation lists. Information about all transactions on the exchange is public and available on the exchange's websites.

Nexus creates individual investment strategies for each client, depending on their preferences for the profit/risk ratio. Shares of large companies are an opportunity to invest in the country's economy and more than recoup their contribution. Nexus trades company shares on most well-known exchanges. Over the past 10 years, the company has firmly taken a leading position in the international market. Invest with a traditional Nexus hedge fund.

​​What are blue chips and how can they be used in trading?

Blue chips belong to the first-tier stocks and are in constant demand among bidders. The name "blue chips" came from the gambling business from the English expression Blue Chips, which denoted the most expensive tokens in the casino. Securities of this type are considered the most attractive for investment. The issuing companies that issue them in circulation are characterized by significant capitalization and positive forecasts for financial dynamics in the long term.

An issuer is classified as a blue chip only if its shares are different:
High liquidity is achieved due to the reliability of the company itself and the large number of securities that are in circulation on the market.
Low volatility is provided by a large number of transactions.
High daily trading volumes guarantee a narrow spread interval. This means that the price difference at the time of purchase and sale is at a minimum level.

Blue chips are effectively used in the financial strategies of all stock market participants:

Newcomers include them in the portfolio to ensure the reliability of their investments.
Active investors use fundamental analysis to invest in sustainable companies.
Passive investors add them to their investment portfolio not for trading on the stock exchange but for profit, which is growing slowly but steadily.

A certain number of investors are dissatisfied with the low profitability of blue chips and call for investing in second-tier securities, which, although they are less liquid, have a large growth potential. However, if the goal of investing is to get a stable profit, blue chips are an alternative option.

The Nexus trust management program distributes your investment capital in 4 trading areas on the leading exchange platforms: stocks, Forex, cryptocurrency and the commodity market. Blue chips are part of the Nexus trading strategy. Despite the low profitability of these positions, the profit from them allows you to cover the costs of other trading directions, allowing our investors to get high profitability with minimal risk.

​​Why do people invest in hedge funds?

At the moment hedge funds are one of the most popular tools in the portfolio of corporate or private investments. According to data provided by the rating agency "Global Alternatives", today the richest people in the world invest a significant part of their capital in hedge funds.

So why are hedge funds attracting more and more investors every year? There are some reasons.

1) High profitability.
Hedge fund returns are much higher than other trust management strategies. They show positive results even under adverse market conditions.

2) Wide possibilities.
By investing in hedge funds, you get the opportunity to work in all markets and invest in all available financial and exchange-traded tools.

3) A wide variety of strategies.
Hedge funds cover almost all types of asset classes: not only stocks and bonds but also real estate, currencies, derivatives, and so on.

4) Diversification.
Diversification of the investor's portfolio helps to reduce risk and volatility and increase profitability.

5) Talented managers.
Your assets are managed by qualified specialists with long time experience.

It is obvious that hedge funds are a promising direction, which popularity will grow every year and bring investors more and more income. What is really important is to choose a hedge fund that you will trust. The company Nexus has been on the market for more than 10 years. We create individual trust management strategies based on the client's investment preferences, expected level of return and possible risks.

Entrust your investment to professionals whose competence is proven by time and results!

​​Mutual funds VS Hedge funds

In the changing conditions of a modern market, the investor faces a difficult choice where to invest funds with maximum profit. Today, we will compare mutual and hedge funds to understand the key differences between them:

1. Fall protection.
Hedge funds seek to protect their profits and capital in case of market declines by easily adapting to existing conditions and using various hedging strategies. For example, "short selling" tactics, when securities are sold with the promise to buy them back later, or extracting benefits from a broader distribution of assets and diversification. While mutual funds use more traditional methods and are therefore less protected.

2. The investor's income level.
Hedge fund managers do not have any restrictions in the choice of investment strategies and have the ability to invest in any asset class or instrument. The role of a fund manager is to maximize capital, not just to be content with the norm met. While mutual funds are generally risk-averse, they offer limited returns to the investor. They must adhere to the goals of the fund, so if the possibility of making a profit is beyond their competence, it cannot be realized.

3. The ability to make a profit in volatile market conditions.
A low correlation coefficient allows hedge funds to generate returns that have little correlation with traditional investments. Therefore, there is no direct correlation that if the market falls, the investment portfolio should bring a loss or vice versa. Whereas the predictability of mutual fund returns is not measurable.

4. Caution in decision-making.
One of the unique and mandatory criteria for hedge funds is that the fund manager must be one of the major investors in the fund, which makes them cautious when making investment decisions. While this is not mandatory for mutual funds. Management is carried out by a professional manager.

Which investment option to choose is up to you. Nexus is a hedge fund with a long history. Our activity is based on the work of professional traders, analysts and managers, whose experience is more than 12 years. The Nexus investment program distributes your capital to the leading exchange platforms, allowing you to have income in 4 trading areas: shares, Forex, cryptocurrency and the commodity market.

​​How can you make money on long and short positions?

A long position is one of the most popular trades on the stock market. Its mechanism is the easiest to understand, and therefore newcomers to the exchange usually start with it.
This method of trading is used by investors when they expect the growth of quotations. The point of a long position is to buy shares while they are cheap and sell them when they get more expensive.

An investor opens a long position when they buy shares. As long as the investor holds the stock, it is said that he "holds a long position". The investor closes a long position by selling shares. Profit is obtained as the difference between the purchase and sale prices. This position is called long because it can be held indefinitely.

The securities market is growing in the long term. An individual company's stock can theoretically go up indefinitely. So you don't have to worry too much about price fluctuations in the short term. Even if the shares fall in price, they will recover in a few years and will most likely grow even more, bringing profit to the owner.

An investor opens a short position in the hope of making a profit from a drop in market prices. In order to do it, he borrows shares from a broker secured by cash, sells them on the market and waits for them to fall in price. Then the investor is expected to buy the same number of shares, but at a reduced price, and return them to the broker. And the difference between the sale price and the purchase price remains with the investor as a profit.

Unlike a long position, a short position can only be opened for a short period of time. This is due to the fact that the investor is obliged to return the securities that he lent to the broker.

The Nexus hedge fund bases its strategies on classic economic principles and tools. This allows you to get the maximum benefit from various economic circumstances, both bad and good. For example, a combination of the principles of long and short positions makes it possible to make money on the fall and rise of markets, as well as minimize risks by buying "reverse" positions.

​​Hedge funds foresaw the threat of an epidemic

The hedge funds were the first to see the threat in the coronavirus and were able to capitalize on it.
They took protective measures even when the market was at full speed going to its highs.

The hedge funds are known for the highest profits among various funds, especially during periods of severe market turmoil such as now. This time, the hedge funds were the first to recognize the risks of a global pandemic and a slowing economy.

First, they got rid of the stocks that would be the most affected by the COVID-19 outbreak. In early February, when the market was growing, the hedge funds began selling shares of travel companies, airlines and cruise companies or opening short positions on them.

A month later, in early March, the funds began selling shares of companies that were less likely to fall in the economic downturn. Companies with weak balance sheets were selected, assuming that they would suffer greatly from a long downturn in the economy.

In addition to operations with shares, it was also possible to earn money on operations with debt securities. In mid-February, the fund bought indices of high-yield bonds and investment-grade bonds. A month later, when bonds rose in price due to the increased likelihood of corporate defaults, the fund managers closed half of their positions.

Hedge funds also cashed out previously purchased Put Options (the insurance tools that give their owner the right to sell an asset by a certain date at a certain price) on the US and Indian stock indexes. When the epidemic in Wuhan, China, began to take hold at the end of January, the managers were left in no doubt that the coronavirus posed a serious threat to the world economy.

As a result, by the end of March, the value of the fund's assets increased, while the S&P 500 index fell by 19.6% during this time.
Our strategy is based on protecting capital from falling.

​​Key features of hedge funds

There are several important parameters that distinguish hedge funds from others.

A wide range of investments
Investment funds usually provide profit solely by buying and selling securities. Hedge funds can invest in a variety of assets: stocks, real estate, derivatives, currency, and so on.

Risks
The manager of a conventional fund can use borrowed funds to increase profits. However, the situation that happened in 2008 (the global financial crisis) showed that leverage can cause large losses if the price starts moving in the opposite direction from the expected direction.
The hedging method allows you to minimize these risks. That is why hedge funds show stable profits over a long period of time.

Profit
The Manager receives 1-2% of the total investment amount for servicing depositors in investment funds. This is a weak incentive to get a large profit. In the case of hedge funds, the situation is different. In addition to management fees, the manager receives a % of the fund's profit. Thus, the financier is interested in maximizing profits.

​​How to curb risks?

Using specific hedging instruments, such as derivatives, an investor can offset adverse changes in the price of an asset. Let's take a closer look at them.

1) Forward contracts
Forward contract, or a forward is the first and the oldest way to curb risks.
Take for example the shares. An investor has bought shares for 54$ each. All of a sudden the quotations reach 57$. Someone on the market is likely to believe that the growth will continue or he/she needs shares in two months, so he/she is ready to buy them from you at a price of 58$ each, with the settlement taking place in two months. The 58$ per each transaction is carried out under the forward contract. So, you will receive the 4$ profit for sure. That is what forward hedging looks like. The investor gains sustainable profits anyway.

2) Swap
Swap is a hedging instrument involved in exchange of products or conditions, carried out by parties to transaction. In our example, the one who buys 58$ shares (let's call him "investor two") actually exchanges the future acquisition of shares at floating market price for fixed price in order to curb the risks.

3) Options
An option is an advanced forward.
An investor strikes a deal, under which in some time he/she will or will not voluntarily sell the asset at fixed price. The decision will be based on market environment.
If the investor decides not to sell the asset, the other party to this contract will also hedge its risks by gaining bonuses that make up for lost profits.

It is necessary for a modern hedge fund to implement all the available financial instruments in order to ensure high returns. Each situations may be addressed with several methods, but only one of them will turn out to be the most profitable. To achieve the target levels of returns and risks, the professional Nexus fund team implements a wide range of hedge instruments depending on the investment preferences of clients.