On other social investment networks profiled here, such as eToro and ZuluTrade, investors can try out strategies on demo accounts before signing up. But on Currensee, "lookie-loos" are locked out unless you sign up for an account with one of its brokerage partners.
What makes Currensee, founded in 2008, a bit different from other social investment networks is the proprietary trade leader selection process. Instead of letting just anyone in the trade leader door, Currensee handpicks their traders.
"We find foreign currency traders, professionals, anywhere in the world. We find them and analyze their performance. We vet them essentially the same way that hedge funds would vet traders for themselves. They go through our analysis, and if we deem them suitable, we present them on the Internet on the leaderboard to customers," says Dave Lemont, CEO of Currensee.
Investors must deposit $5,000 to start, and there are minimum capital requirements for trade leaders "to ensure that you are not over-leveraged," according to the Currensee website.
"We suggest a minimum account size of $5,000 or equivalent to allow for reasonable diversification of leaders in your portfolio. Individual trade leaders have minimum allocations from $1,000 up to $6,000, so you may need more capital to invest in some leaders or to construct certain portfolios of leaders," says David Karp, vice president of marketing with Currensee.
Types of investments available
Currensee limits itself to investments within the forex market.
How much does it cost?
On a monthly basis, investors pay a 2 percent annualized fee on assets. Plus they fork over a success fee of 20 percent of profits per month per trader. If you have no profits, you don't pay a success fee.
"In general, 15 percent of the success fee goes to the trade leader, while 5 percent goes to Currensee -- but the deals vary among trade leaders," Karp says.
Investors have a few levers for controlling risk. The maximum drawdown can be set, leverage capped and currency pairs can be limited.
"These controls are available to clients on a per-trade leader basis," says Karp.
Setting your maximum drawdown allows you to stipulate the lowest you want your account to dip from either the account's high watermark or from your initial investment in that trade leader. It is expressed in percentage terms. Investors can also decide which currency pairs they are comfortable trading.