How to manage money as a business?
Hi! This has been a great community so far. I wanted to discuss a common topic to not only help myself out but to anyone interested in it. Lately, I have been working on an idea to finally trade for others providing a service and that has come with a few challenges.
The only reason behind having to open a business rather than trading for yourself
I'm planning on discussing all the steps I took before thinking of managing money. And the steps to grow as an individual trader. But, before doing so, it is probably well known by the community that continuing down this path and getting in business adds a whole new responsibility layer. To compensate for this risk, and effort, the only reason it is worth going forward is because you have a working strategy that is not being exploited to its full potential.
For individual motives, opening a business is the only way to serve others and get compensated for it. But, considering market motives, the business should be offering a complete new option to investors. This could be either eliminating money lock-ups (this is pretty common today), or daily liquidity for withdrawals, or significant risk reduction by reducing exposure, or bringing uncorrelated returns compared to traditional investment vehicles and other assets.
I have come to think lately that managing other's people money for the prestige, or any other emotional reason, should not sustain the constant effort to be compliant with all the new responsibilities. It should be a better decision to continue if this is the business you can create to have the scale you need to grow individually, and, at the same time, offer the market a new investment vehicle.
Personal journey
At around early 2016 I began trading and realized that should be an endeavour that I would have to take very seriously. There was no other alternative for me. Having an extended corporate carreer was a slim possibility. As it was working for the government. I had a terrible vision for our country's public pension system and these should be just a few reasons why I could not turn back. But it wasn't until 2018 that I began to register a verified track record with consistent patterns and good performance. From 2017, to the entirety of 2018, and to today, I've gathered numbers that make me comfortable to have an attempt and offer other people, and not only myself, these results if they actually believe it serves their best interest in this market.
Progressing and going forward was truly a solitary moment. Before isolating myself and accumulating trading experience I had the chance to learn from Steven Hawkins, from Chicago, the author of the book Steidlmayer on Markets, and Peter Steidlmayer. Many of us can be inspired by multiple people but Peter, and Steven, served a personal role to me. Their most insightful piece of idea was that, in order to be successful, you have to reduce the risk of being the first person trying to find a new price. Many stories and articles come out and make individual traders think they are somewhat behind, and that people with industry credentials, rather than raw talent, look way successful, but in fact, the opposite is the case. As both Peter and Steven have not come from a traditional career path there is nothing that I looked up to in the industry nor in the academic world.
The experience made me realize there is indeed a difference between trying to find new prices and going along with them. That individual traders are not supposed to think like other larger participants if they don't have the capital. That you should be very aware of how much significance your trades have on the market in order to develop a working strategy.
"Everyone successful on the floor found a way to reduce the risk of finding prices by themselves. The ones who didn't were gone" He said.
But each of them did it in their particular way. So, from that point on, that was the beginning of my journey to accumulate experience and cultivate self-reliance over the idea of going forward with trading. That was a very solitary moment as I can recall. As of today I am making roughly 12% annualized returns with 4% risk as maximum drawdown on all of the capital. I am also not willing to extend this drawdown any further.
The idea of managing money
For myself, the idea of managing other people's money came as a solution. At the same time I believe people could be interested in sharing my results on their individual accounts I am also willing to explore the strategy that I apply to a more significant extent as long as market conditions allow me to do so. I calculated that a $5M account should be the maximum for what I am doing.
For any individual FX trader it is my belief that you should not necessarily apply for the status of a hedge fund that carries multiple licenses and a fund that trades multiple markets. As we have discussed, I believe it's very important to figure out how much capital can be deployed for what you do and manage your resources to serve investors in an efficient way.
If you have been in these markets and believe you could work together investing with me please send me inquiries only through private messages. I don't believe I should disclose details on this topic. But as I have already showed you my intent on going forward managing money I welcome discussing this over direct messages.
Who else has done it?
I consider a great opportunity to have the Forex Factory hub and their news feed. They have given a lot back to me over the years. But as I got accustomed to the loneliness and solitary experience of trading I could have been a bit more active around this community.
But is there anyone who took down this road to managing other people's money straight from the Forex Factory's forum? I have particular preferences over which brokers to use that I am willing to share with anyone who has been dealing with this for longer than I am. Considering many aspects from execution transparency to regulatory matters.
Have a great day all readers!
Hi! This has been a great community so far. I wanted to discuss a common topic to not only help myself out but to anyone interested in it. Lately, I have been working on an idea to finally trade for others providing a service and that has come with a few challenges.
The only reason behind having to open a business rather than trading for yourself
I'm planning on discussing all the steps I took before thinking of managing money. And the steps to grow as an individual trader. But, before doing so, it is probably well known by the community that continuing down this path and getting in business adds a whole new responsibility layer. To compensate for this risk, and effort, the only reason it is worth going forward is because you have a working strategy that is not being exploited to its full potential.
For individual motives, opening a business is the only way to serve others and get compensated for it. But, considering market motives, the business should be offering a complete new option to investors. This could be either eliminating money lock-ups (this is pretty common today), or daily liquidity for withdrawals, or significant risk reduction by reducing exposure, or bringing uncorrelated returns compared to traditional investment vehicles and other assets.
I have come to think lately that managing other's people money for the prestige, or any other emotional reason, should not sustain the constant effort to be compliant with all the new responsibilities. It should be a better decision to continue if this is the business you can create to have the scale you need to grow individually, and, at the same time, offer the market a new investment vehicle.
Personal journey
At around early 2016 I began trading and realized that should be an endeavour that I would have to take very seriously. There was no other alternative for me. Having an extended corporate carreer was a slim possibility. As it was working for the government. I had a terrible vision for our country's public pension system and these should be just a few reasons why I could not turn back. But it wasn't until 2018 that I began to register a verified track record with consistent patterns and good performance. From 2017, to the entirety of 2018, and to today, I've gathered numbers that make me comfortable to have an attempt and offer other people, and not only myself, these results if they actually believe it serves their best interest in this market.
Progressing and going forward was truly a solitary moment. Before isolating myself and accumulating trading experience I had the chance to learn from Steven Hawkins, from Chicago, the author of the book Steidlmayer on Markets, and Peter Steidlmayer. Many of us can be inspired by multiple people but Peter, and Steven, served a personal role to me. Their most insightful piece of idea was that, in order to be successful, you have to reduce the risk of being the first person trying to find a new price. Many stories and articles come out and make individual traders think they are somewhat behind, and that people with industry credentials, rather than raw talent, look way successful, but in fact, the opposite is the case. As both Peter and Steven have not come from a traditional career path there is nothing that I looked up to in the industry nor in the academic world.
The experience made me realize there is indeed a difference between trying to find new prices and going along with them. That individual traders are not supposed to think like other larger participants if they don't have the capital. That you should be very aware of how much significance your trades have on the market in order to develop a working strategy.
"Everyone successful on the floor found a way to reduce the risk of finding prices by themselves. The ones who didn't were gone" He said.
But each of them did it in their particular way. So, from that point on, that was the beginning of my journey to accumulate experience and cultivate self-reliance over the idea of going forward with trading. That was a very solitary moment as I can recall. As of today I am making roughly 12% annualized returns with 4% risk as maximum drawdown on all of the capital. I am also not willing to extend this drawdown any further.
The idea of managing money
For myself, the idea of managing other people's money came as a solution. At the same time I believe people could be interested in sharing my results on their individual accounts I am also willing to explore the strategy that I apply to a more significant extent as long as market conditions allow me to do so. I calculated that a $5M account should be the maximum for what I am doing.
For any individual FX trader it is my belief that you should not necessarily apply for the status of a hedge fund that carries multiple licenses and a fund that trades multiple markets. As we have discussed, I believe it's very important to figure out how much capital can be deployed for what you do and manage your resources to serve investors in an efficient way.
If you have been in these markets and believe you could work together investing with me please send me inquiries only through private messages. I don't believe I should disclose details on this topic. But as I have already showed you my intent on going forward managing money I welcome discussing this over direct messages.
Who else has done it?
I consider a great opportunity to have the Forex Factory hub and their news feed. They have given a lot back to me over the years. But as I got accustomed to the loneliness and solitary experience of trading I could have been a bit more active around this community.
But is there anyone who took down this road to managing other people's money straight from the Forex Factory's forum? I have particular preferences over which brokers to use that I am willing to share with anyone who has been dealing with this for longer than I am. Considering many aspects from execution transparency to regulatory matters.
Have a great day all readers!
Try to work in team. For myself as a full time trader, I would try NOT to meddle too much business wise as it would affect my psychology as a trader.
