'No surprise copy-trading is growing at such pace, it's a win-win for everyone' - Alex Katsaros, Kawase Exchange

ALEX KATSAROS
PROFILE
• Current Job: CEO at Kawase Exchange
• Career: Started his career as a Sales Trader before becoming Head of Product Development at Spotware, where he managed Forex applications for trading. CEO at Kawase Exchange since April 2016.

View profile at FXStreet

Alex Katsaros is the CEO at Kawase Exchange, a European online trading broker inspired by the Japanese concepts of trust, honor, fairness, determination, flexibility and simplicity.
Alex started his career as a Sales Trader before becoming Head of Product Development at Spotware, where he managed Forex applications for trading. He is the CEO at Kawase Exchange since April 2016.

Can you talk about the history of Kawase, how it was founded and how you became interested in FX?

Kawase was launched in 2015 focusing on key Asian markets. Since then, we’ve grown and expanded globally. That doesn’t mean that we consider ourselves new in this business. Our team is comprised by professionals with many years of experience in the investment industry. Kawase is a multi asset brokerage firm offering shares, indices, ETFs, Forex, metals and energies. Our goal is to become the leading cTrader brokerage by leveraging our deep understanding of the platform. Our value proposition is focused around technology, transparency, reduced costs and great support.

In regards to the second question, I started with the financial markets back at 1998 during an unprecedented Greek stock market boom by working as a junior sales trader. I got into technical analysis early using primitive, by today’s standards, software. I have been passionate about trading ever since. Throughout my bachelor's in I.T. as well as my M.B.A, I was focused on getting into projects and elective courses about the financial markets and financial software.

After graduating, I worked as an FX trader in a Luxemburg based hedge fund. That’s where I discovered forex and I was immediately blown away by the superior technology, 24 hour trading and ease of access of the FX industry.

Later on I continued my career in Spotware as head of product development for the globally acclaimed cTrader suite, which is the product we are offering in Kawase. I was fortunate enough to work with great people and acquire valuable experience in all aspects of the Forex industry.​​​​​

How has the copy-trade industry evolved since you got into the brokerage end of the business?

It has definitely evolved a lot since I managed the development of cMirror. At the time, we focused on solving the high latency and bad execution problems found in competing solutions. Looking from the other side, judging from Kawase’s cMirror performance, the evolution we were expecting for copy-trading has come true.

Portfolio managers are shifting into signal providing, either to generate an extra source of revenue besides their main activities, or even switching to signal providing full time. Copy-trading is less complex, social, it allows the investor to have full control of his account, it requires no power of attorney agreements, participants receive the same performance and it’s more transparent, so it’s no surprise what copy trading is growing at this pace.

It’s a win-win for everyone. It’s a step forward from outdated PAMM solutions. That’s why both signal providers and investors are all over it. My opinion is that it certainly hasn’t peaked yet, it’s still going strong and it's a central part of our product offering.

How high is the profitability of your clients?

It’s difficult to answer this question with a generalization, or by saying it’s “this” high. Trading is all about the individual. There are thousands of different strategies and approaches to trading.

Some of our clients are Experienced traders that are often double or quadruple their accounts , by taking moderate risks using trading strategies revolving around technical analysis, news trading and risk management.

Our professional clients, money managers and trading firms, usually go for double digit ROIs, accepting a lot less risk while working on their accounts for months, slowly getting to their target revenues. They often trade with us algorithmically and with sophisticated risk management methods, demanding solid performance and stability.

Other clients view trading as a leisure activity, accepting higher risks and going “all in” by increasing their exposures as long as their equity goes up. They can get crazy returns, but at the same time accept the higher chance that their accounts will get stopped out.​​​​​

Are your clients more seasonal or do they tend to trade more during volatile markets? And how are they geographically distributed?

The majority of our traders drastically increase their activity during volatile events. The fact of the matter is that with the amount of products Kawase is offering, there is always some high volatility market somewhere, currencies crashing, IPOs, earnings calls or high impact news.

For example, during last August, mostly regarded by industry insiders as a “flat month” in FX, we saw a dramatic increase in both indices and precious metals.

I suppose a few traders have seasonal habits. Some prefer to trade more during their holidays or trade when quarterly results are being released. Others prefer to trade only a couple of instruments, thus they are trading more sporadically when they identify a trend. Most of our traders however are quite passionate and constantly find opportunities to capitalize on.

We might have started from Asia but we are working towards equal presence in all continents. So far we are reaching our goals with clients spawning from eastern Asia to Europe, and then all the way to the Americas.

How did a very volatile event like the recent GBP Flash Crash affect your clients? As a retail trader, is there any way to be protected against such a move?

It’s well known that events of extreme volatility in Forex can be either opportunities or threats for traders. Unlike stocks traded in stock markets where the biggest amount of participants buy and hold, in Forex, traders are usually spread evenly among the Long and Short direction of a currency pair. Some of our clients lost a lot and some profited a lot depending on if they were Shorting the pound.

It’s quite easy to be protected against sharp movements. All traders have to do is set a Stop Loss order protecting their position. Kawase’s order screens help novice traders by displaying the exact amounts and percentages that are risked.

Even on the 7th of October, the day we’ve seen the sharpest move for GBPUSD when the market crashed 300 pips in one minute, Stop Loss orders protected a lot of our clients. Sure it’s a Market Order and will be filled with some slippage during a volatile event of this magnitude, however 50 or 100 pips should not be enough to threaten a low risk trading strategy. 

Kawase offers leading ETFs and benchmark world indices on CFD basis. How is that product being received?

Indices are very popular amongst our customers. Even customers who don’t trade them directly are often analysing Indices charts for intermarket analysis. Particular Indices often correlate with specific Forex pairs, besides the obvious correlation with Stocks.

ETFs is not a well known product for traditional Forex traders, thus are below indices and Forex in volume. Some traders have to google the term to find out exactly what ETFs are. ETFs do however have their own niche audience. It’s our job to educate our clients about ETFs, to help them discover the most appropriate markets. 

What else can we expect to see from Kawase in the coming months?

We’ve got very big plans for 2017. We are working on creating a centralized product that connects every participant of this industry - signal providers, portfolio managers, investors, traders, algorithmic traders, algorithmic developers, analysts and partners.

Every industry professional will find a way to offer his services. Every investor will discover alternative methods to invest or an array of different products to acquire if he prefers to trade by himself. We’re also working on further differentiating Kawase and offering even more trading products to our clients. I couldn’t be more excited about the future.