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Risk-free capital for 1-year + experienced traders-cum-coders

  • #81
  • Sep 27, 2017 5:06am Sep 27, 2017 5:06am
Quoting Bicarus
{quote} cum is the shorthand for cumulative.

This makes sense: "traders-come-coders"

"cum" is something else ... (:
  • #82
  • Sep 27, 2017 5:24am Sep 27, 2017 5:24am
Quoting Bicarus
cum is the shorthand for cumulative.
Yes, it originates from the same Latin word meaning 'and', 'with', or 'including'.
Like 'summa cum laude' = 'with the highest praise'.
  • #83
  • Sep 27, 2017 5:46am Sep 27, 2017 5:46am
Quoting hanover
{quote} Yes, it originates from the same Latin word meaning 'and', 'with', or 'including'. Like 'summa cum laude' = 'with the highest praise'.
Yes, but use is improper here ... makes no sense to a native english speaker.
It's like confusing "lose" and "loose"
  • #84
  • Sep 27, 2017 9:38am Sep 27, 2017 9:38am
Perhaps it is time to turn this thread around and ignore all the capital provider, 3-month demo trading and other crappy requirements mentioned in the first post.

If you are a relatively successful, knowledgeable but inconsistent trader (or just tired of trading!) but HAVE significant capital to invest, what criteria would you define for other traders to 'safely' trade your own money? Perhaps, share the RM/MM portion of your own trading plan in a broader sense and gear this thread towards a more structured and meaningful discussion.

Examples:

  1. Ignore stats from the 'Balance' portion of the trade explorer. It's not helpful imo
  2. Max Equity Drawdown = 15%
  3. Evidence of hard or hidden stop loss or equity% based stoploss
  4. No (N)Hedging to replace or prevent floating loss
  5. Risk per trade no more than 2%
  6. Max Consecutive losses=2 times the number of pairs used for trading
  7. No open trades over the weekend without stop loss that is atleast 50 pips away (even if stoploss is at breakeven)
  8. Preferred Profit Factor, Sortino and Sharpe Ratios?
  9. Anything else?

Staying in my lane...
  • #85
  • Sep 27, 2017 9:52am Sep 27, 2017 9:52am
Quoting VEEFX
Perhaps it is time to turn this thread around and ignore all the capital provider, 3-month demo trading and other crappy requirements mentioned in the first post. If you are a relatively successful, knowledgeable but inconsistent trader (or just tired of trading!) but HAVE significant capital to invest, what criteria would you define for other traders to 'safely' trade your own money? Perhaps, share the RM/MM portion of your own trading plan in a broader sense and gear this thread towards a more structured and meaningful discussion. Examples: Ignore...
It is not possible to make consistent profits using these criteria.
You are listing "dogma" (i.e tenets and axioms of proper trading repeated over and over again to the wannabe forex millionaires)

It does not work.
  • #86
  • Sep 27, 2017 9:52am Sep 27, 2017 9:52am
Quoting VEEFX
Perhaps it is time to turn this thread around and ignore all the capital provider, 3-month demo trading and other crappy requirements mentioned in the first post. If you are a relatively successful, knowledgeable but inconsistent trader (or just tired of trading!) but HAVE significant capital to invest, what criteria would you define for other traders to 'safely' trade your own money? Perhaps, share the RM/MM portion of your own trading plan in a broader sense and gear this thread towards a more structured and meaningful discussion. Examples: Ignore...
6. i would not use this. i have 2 times 1 pip loss and 1 pair traded. and then ? i should stop trading? this regulation i would stop. you have a all in one 2% stop by trade and all in one equity stop mentioned, so this rule 6 is useless and even negative for many systems.
  • #87
  • Sep 27, 2017 10:03am Sep 27, 2017 10:03am
I'm yet to come across a managed account that does what it says it will!!?? Don't exist.... even for over £100k accounts
  • #88
  • Edited 10:19am Sep 27, 2017 10:06am | Edited 10:19am
Guys. These are just "Examples". List yours to make this discussion meaningful so others (and I) can benefit and make it worth our time.

Edit: what do YOU want to see in the Equity tab of trade explorer to assess and verify someone's trading skills and performance? Text book responses is a waste of time !

Again...in the Equity tab and not Balance.

EDIT: #1, #2 and #7 listed are the only three criteria on "my" list. Everything else is 'nice to have' and subject to interpretation.

If we get good responses (as this is a learning opportunity for our readers), next question will be "In order to see your set of criteria, what would you like to see in your back test results as confirmation. Which stats are the most important to meet your own trading objectives"
Staying in my lane...
  • #89
  • Sep 27, 2017 10:19am Sep 27, 2017 10:19am
Quoting VEEFX
Guys. These are just "Examples". List yours to make this discussion meaningful so others (and I) can benefit and make it worth our time. Edit: what do YOU want to see in the Equity tab of trade explorer to assess and verify someone's trading skills and performance? Text book responses is a waste of time ! Again...in the Equity tab and not Balance.
ofcourse, never ever should someone say anyone how many pips earned or balance, only percent/money won or equity. pips and balance tell complete nothing.
  • #90
  • Edited 11:20pm Sep 27, 2017 9:18pm | Edited 11:20pm
Quoting VEEFX
Perhaps it is time to turn this thread around and ignore all the capital provider, 3-month demo trading and other crappy requirements mentioned in the first post. If you are a relatively successful, knowledgeable but inconsistent trader (or just tired of trading!) but HAVE significant capital to invest, what criteria would you define for other traders to 'safely' trade your own money? Perhaps, share the RM/MM portion of your own trading plan in a broader sense and gear this thread towards a more structured and meaningful discussion. Examples: Ignore...
sample of my company's investment mandate.

Attached Image (click to enlarge)
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  • #91
  • Sep 28, 2017 12:52am Sep 28, 2017 12:52am
Quoting Bicarus
{quote} sample of my company's investment mandate. {image}
Thanks for sharing Bicarus. We finally have a professional trader amongst us. If you don't mind,

 

  1. would you mind sharing how much leverage you use in your client's accounts to target 25% annual returns.
  2. I love your max drawdown control of 15%. I am finding it very hard to achieve this. IF you do a Close-All @ max drawdown, how do you get back in the game? Meaning you could receive two consecutive max drawdown related close-all events. How do you manage your client expectation when this happens?
  3. Is your strategy trend following or rangebound/countertrend? what is your average pip win/loss and trade duration? This is just for me to understand how 15% cap of max drawdown is possible. Do you use hard stoploss with your trades? if you carry positions over the weekend, how do you manage risk when market is closed.

I would very much appreciate it.

Staying in my lane...
  • #92
  • Sep 28, 2017 6:13am Sep 28, 2017 6:13am
Quoting Bicarus
{quote} sample of my company's investment mandate. {image}
there is missing in the prices , if you take an increased spread or commission per trade for the clients. is it not necessary in your country to mention this? because this is often the most expansive cost part. or you dont do it regulated, only by copy trades private? why not used as fund, why so simple managed accounts, this is ok for starting but with some millions this is not the smart way. are you just starting your project?
  • #93
  • Edited 6:33am Sep 28, 2017 6:21am | Edited 6:33am
Quoting VEEFX
{quote} Thanks for sharing Bicarus. We finally have a professional trader amongst us. If you don't mind, would you mind sharing how much leverage you use in your client's accounts to target 25% annual returns. I love your max drawdown control of 15%. I am finding it very hard to achieve this. IF you do a Close-All @ max drawdown, how do you get back in the game? Meaning you could receive two consecutive max drawdown related close-all events. How do you manage your client expectation when this happens? Is your strategy trend following or rangebound/countertrend?...
you understand it wrong!
he has not 15% drawdown or at max. he has only a notification to clients by get the level of 15% drawdown. the drawdown can so much higher or in extrem events complete kill the account.
25% win per year for 15% drawdown would be a bad relation, i dont think he has this 15% so as drawdown (maybe 3-5% at max if the system is not bad developed).
or when he takes high spread or commission increasing for clients so he get extra payment for each trade and thatswhy the results for clients would be so "bad" in relation win/risk then maybe this 25%/15% win/drawdown can happen.
  • #94
  • Sep 28, 2017 8:11am Sep 28, 2017 8:11am
i will answer all questions in 1 post.

@dukas_trader: it is discrete managed account model (DMA) not managed fund wherein all client's funds are amalgamated. thus commission/swap paid/received is via clients account to clearing house, not me. i do not have increased spread/commission relationship with broker. all i have is a backend arrangement with the clearing house which netts p&l at end of month. debiting from clients account management fee and crediting it to me if dued based on high water mark.
as stated it is a discrete managed account model because by law i am not allowed to operate a managed fund company as there is a conflict of interest due to my full time job in a bank's trading floor.
so yes, you are right to say it is okay for starting*, but not for managing millions. but it is the model which i want and chose to adapt for reasons stated above. (you can say this is my side gig).

*even thou my model may be of someone starting out in this industry, i've been in business for 5 years.

@dukas_trader: with regards to you questioning my drawdown:returns. rule of thumb is to always overestimate risk and underestimate returns. - this in itself is a risk management.

@dukas_trader, @veefx: i will not go into detail, but 5-7% drawdown is max allowed risk for reversal. once it pops, position will be covered via other instruments at my disposal, clients will book a loss, but a marginal one. once 15% threshold is reached, which is a dead stop, all positions will be liquidated and clients will be notified that they have taken a loss after netting positions. which basically means for that month, there will be no new high water mark.
main purpose of informing client @15%, is simply for accountability, on my end, holding up to the terms stipulated on the contractual agreement and also, more importantly for clients to weigh their own risk if they still feel comfortable going forward/pulling out. that said, im proud to say that the 15% notification clause has only been exercised once, on the 7/10/16, flash crash of the pound which due to the nature of the event, clients booked a 17% loss after netting. we have since recoverd vastly since then.

to summarize, FX is a mere instrument, a tool. every sticky situation is unique due to its cause and sentiment. but there is always a wiggle room to mitigate losses. im not talking about martingale/ doubling down on the same instrument.

did clients leave me then when i excercised liquidation of all positions?
many definitely did, some stayed. those that left were for 2 simple reasons (1)type of investor that only sees the upside but not the risk, (2)playing it safe by retracting all funds till i broke new high watermark before coming back onboard.

but one thing which i've learnt. savy investors that do not just look for funds that bring in the highest return, they place higher value and emphasis on someone whom can steer the ship in the stormiest of storms. if the ship comes out damaged, it is okay, for it is repairable. the problem arise only when the ship doesnt come out of the storm.

i may not rake in the biggest/highest returns for my clients, but i'll be damned sure that i will fight for protection of capital. because my own accounts/money is on the line too.
  • #95
  • Sep 28, 2017 8:29am Sep 28, 2017 8:29am
Quoting Bicarus
i will answer all questions in 1 post. @dukas_trader: it is discrete managed account model (DMA) not managed fund wherein all client's funds are amalgamated. thus commission/swap paid/received is via clients account to clearing house, not me. i do not have increased spread/commission relationship with broker. all i have is a backend arrangement with the clearing house which netts p&l at end of month. debiting from clients account management fee and crediting it to me if dued based on high water mark. as stated it is a discrete managed account model...
for a side job quit nice.

i would do commercial also low, when you get more then 25% people are more excited about what they got. when you get 40% win by only waited for 25% your are more pleased to put in more then when someone targets 50% and gets 40%. and your goal to hold drawdown small is only correct way to trade, all needs to be calculated from drawdown as starting point.
  • #96
  • Sep 28, 2017 10:52am Sep 28, 2017 10:52am
I will post for download next week three different pdfs for the benefit of FF members who are seriously interested in pursuing fx trading business.

1. Fx trading Business: How to be your own boss : It will be for those who have money and some trading experience. They need not go for any fund manager.

2 Fx family trading business: Members of family become analyst, trader and risk controller after pooling together their own money to conduct their business.

3. Fx trading consultation business: Capital providers use your time for trading retaining the ownership of the account and exercising risk controls themselve.
Your job is to submit yourself to their validation process, get trading guidelines and get paid every month.

Please do not send any PM and most of the queries will be replied here. Negative comments will be ignored.
Practice makes a person perfect
  • #97
  • Sep 28, 2017 3:07pm Sep 28, 2017 3:07pm
Quoting VEEFX
{quote} Thanks Bicarus for your response. I now understand but still very impressed in your ability to limit drawdown. To dissect a litter further and to compare it with my experience... "5-7% drawdown is max allowed risk for reversal.".... The only way to limit drawdowns imo is to trade reversals i.e. bounce off SR or whatever instead of breakouts or trend following trading style. (
No. the best way reducing drawdown is using lower trading amount and so reducing drawdown and win ofcourse.
the only important number is the drawdown, the rest you calculate from this. ofcourse we speak about high winning systems, with a bad system the help for drawdown calculation will not change anything.
  • #98
  • Sep 28, 2017 5:17pm Sep 28, 2017 5:17pm
Quoting RondaRousey
{quote} Agreed. Basically if you don't know who the noob is, it is you. Sharks feed on noobs by showing high returns but not show true DD
I would agree with dukas as well if he means trade small position size. It's a no brainer that trading small with lower leverage results in reduce risk and reduced max drawdown. Perhaps i am the only fool asking about this so lets try this one more time. I am only concerned with max drawdown of floating equity. Not realized trades, not the balance curve. My realized drawdown (from trades closures as in PNL) is under 5%. No big deal. I can limit to even 1% if i chose to BUT as a position trader, I have over 100 trades floating in profit for weeks and months. This represents ts my equity curve. Equity curve can explode to 50-60% in my direction creating a very high watermark for my performance. Next day, another news against my direction can create a greater drawdown from that high water mark. How do you control drawdown on your floating trades when your clients can sign up to join you any day of the week or month ???

Edit- I am not looking for textbook responses.
Staying in my lane...
  • #99
  • Sep 28, 2017 5:28pm Sep 28, 2017 5:28pm
Quoting VEEFX
{quote} I would agree with dukas as well if he means trade small position size. It's a no brainer that trading small with lower leverage results in reduce risk and reduced max drawdown. Perhaps i am the only fool asking about this so lets try this one more time. I am only concerned with max drawdown of floating equity. Not realized trades, not the balance curve. My realized drawdown (from trades closures as in PNL) is under 5%. No big deal. I can limit to even 1% if i chose to BUT as a position trader, I have over 100 trades floating in profit for...

highwater mark is difficult topic. without is bad, with it its a extrem problem, that some trade risky before the calculation when they have bigger losses and to get all back or would anyway dont earn anything.

maybe this will work for you:
you calculate each trade until you stoploss, so all trades together are your complete risk in market, when all will hit stoploss same time (minus the uncorrelated trades ofcourse or trade or opposite trades).this is your drawdown risk of 5% or??
if yes, then: when oyu order go in win you do sl putting to thers level or you dont do, whatever you do: recalculate the 5% drawdown you want have at max to your actuell equity at each moment and close position size when its neccessary all the time. if you narrow stoplosses you get buffer again for new orders, if you dont narrow, no new order possible until you close parts of old order or full.

are you martingale trader or basket martingale, or basket complete trader? because 100+ order always open is a lot and sounds like hedge basket or martingale trading.
  • #100
  • Edited 5:48pm Sep 28, 2017 5:30pm | Edited 5:48pm
Quoting VEEFX
{quote} I How do you control drawdown on your floating trades when your clients can sign up to join you any day of the week or month ??? Edit- I am not looking for textbook responses.
what do you use? pamm, mam or copy trade accounts?
are clients to small for company shares or fund creation?
are this wealth clients so you can open fund in malta for much cheaper costs or do you need regulations for can offering to small clients too?

when clients join its unimportant when they join, because drawdown is calculated from max equity value. so whenever you put they inside the accounts and trade is done for them (depends from mam, copy trade or pamm how its done) the drawdown is same for all from last peak or the news clients have even smaller drawdown then the old clients - but depends also how your old orders are done to new clients (all orders parts for new client, or you need open by yourself new part....). so i dont understand the question exactly, can you tell me more in detail?
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