Those who trade for other people... | Forex Factory

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Those who trade for other people...

  • #1
  • First Post: Feb 12, 2008 1:22am Feb 12, 2008 1:22am
This is for those who trade for other people.
Does it affect you in any way when you trade for others vs just for yourself? Do you feel the pressure? Do you tend to be more cautious? indifferent?..

When I trade for myself, my approach is very 'robotic'. I execute trades following my plan without second thoughts. Now that I trade for a few people, I feel that I am more cautious. I am more selective in my trades. I also studying and keeping mental notes of my successful and failing trades.

Basically I can see the psychological effect it has on me when I am trading for others vs just for myself. I like that I am selective studying every trade. But not sure if this is based on fear of losing other's money and that would lead me not following my plan.
  • #2
  • Feb 12, 2008 1:37am Feb 12, 2008 1:37am
In the near future I was planning on managing funds for my friends and family and later for anyone interested and wasn't planning on charging fees or commissions. I noticed this is your take in Nocturnal Funds. If this is truly what you are doing then I salute you.

I would like to discuss how exactly this is handled. First, when a client signs and issues a Power of Attorney (PoA), does that give you the right to entirely control their account (as if you are the sole owner of that account), or does it grant a restricted access in some form?

Happy pips for both you and your clients! =]
  • #3
  • Feb 12, 2008 1:43am Feb 12, 2008 1:43am
Quoting hilmy83
This is for those who trade for other people.
Does it affect you in any way when you trade for others vs just for yourself? Do you feel the pressure? Do you tend to be more cautious? indifferent?..

When I trade for myself, my approach is very 'robotic'. I execute trades following my plan without second thoughts. Now that I trade for a few people, I feel that I am more cautious. I am more selective in my trades. I also studying and keeping mental notes of my successful and failing trades.

Basically I can see the psychological effect it has on me when I am trading for others vs just for myself. I like that I am selective studying every trade. But not sure if this is based on fear of losing other's money and that would lead me not following my plan.
I personally think it depends who "they" are.
I only trade for people I know, or people who know people who know me (huh? did that make sense? friends of friends if you like and cause I'm not allowed to solicit business accoring to regulatory bodies :.)

No seriously, I think it gets easier over time. It is a bit hairy at first, but eventually, it all kinda melts into one, and your train of thought gets back on track.
Just do what you've been doing all along. You know you're a good trader. They must think so too, else you wouldn't have their dosh. Treat it all as "one". Stick to the plan.
Keep a proper joural and records, rather than mental notes is one suggestion I would make though!
Carpe Divitiae
  • #4
  • Feb 12, 2008 1:46am Feb 12, 2008 1:46am
Quoting hilmy83
This is for those who trade for other people.
Does it affect you in any way when you trade for others vs just for yourself? Do you feel the pressure? Do you tend to be more cautious? indifferent?..

When I trade for myself, my approach is very 'robotic'. I execute trades following my plan without second thoughts. Now that I trade for a few people, I feel that I am more cautious. I am more selective in my trades. I also studying and keeping mental notes of my successful and failing trades.

Basically I can see the psychological effect it has on me when I am trading for others vs just for myself. I like that I am selective studying every trade. But not sure if this is based on fear of losing other's money and that would lead me not following my plan.
As an advice, reduce trading sizes as much as possible because you are passing an important periode in your tading life. The other side of coin is when you trap in losing streak and pressure will be unbelieveably high.

After a while everything will be normal.
Positive Thinking
  • #5
  • Feb 12, 2008 1:50am Feb 12, 2008 1:50am
Quoting fsiltd
I personally think it depends who "they" are.
I only trade for people I know, or people who know people who know me (huh? did that make sense? friends of friends if you like and cause I'm not allowed to solicit business accoring to regulatory bodies :.)

No seriously, I think it gets easier over time. It is a bit hairy at first, but eventually, it all kinda melts into one, and your train of thought gets back on track.
Just do what you've been doing all along. You know you're a good trader. They must think so too, else you wouldn't have their dosh. Treat it all as "one". Stick to the plan.
Keep a proper joural and records, rather than mental notes is one suggestion I would make though!
Agreed - you need to just do what you always do. I've gone from trading a few thousand on my own live account to a six figure sum that I'm now managing.

First day was a little scary but now ignore those extra zeros and just get on with trading the way I nomally trade. So far, so good

Kind Regards
Steve
  • #6
  • Edited 1:54am Feb 12, 2008 1:51am | Edited 1:54am
Quoting Ilunore
In the near future I was planning on managing funds for my friends and family and later for anyone interested and wasn't planning on charging fees or commissions. I noticed this is your take in Nocturnal Funds. If this is truly what you are doing then I salute you.

I would like to discuss how exactly this is handled. First, when a client signs and issues a Power of Attorney (PoA), does that give you the right to entirely control their account (as if you are the sole owner of that account), or does it grant a restricted access in some form?

Happy pips for both you and your clients! =]
No. Power of Attorney, or Limited Power of Attrorney rather, only gives you the right to execute trades (ie open, adjust and close positions) with their funds (often it is only on their request, check the legalities carefully). If their "permission" is not required for every trade, then that still only gives you that much right over their funds. You cannot withdraw it and buy a nice boat or anything like that .
This of course depends on the setup from the beginning. If you are acting as an advisor, make sure you are regulated, or exempt from regulation according to your countries laws. Secondly, are the funds pooled, or in seperate client accounts. It's a little trickier than it first appears, even if they are friends and family. There's nothing quite like money to turn even your friends and family against you. Make sure YOU are protected and operating within regulations and rights.
Too many people take it too lightly and get burnt, again, even by friends and family.
Carpe Divitiae
  • #7
  • Edited 2:08am Feb 12, 2008 2:06am | Edited 2:08am
Quoting fsiltd
No. Power of Attorney, or Limited Power of Attrorney rather, only gives you the right to execute trades (ie open, adjust and close positions) with their funds (often it is only on their request, check the legalities carefully). If their "permission" is not required for every trade, then that still only gives you that much right over their funds. You cannot withdraw it and buy a nice boat or anything like that .
This of course depends on the setup from the beginning. If you are acting as an advisor, make sure you are regulated, or exempt from regulation according to your countries laws. Secondly, are the funds pooled, or in seperate client accounts. It's a little trickier than it first appears, even if they are friends and family. There's nothing quite like money to turn even your friends and family against you. Make sure YOU are protected and operating within regulations and rights.
Too many people take it too lightly and get burnt, again, even by friends and family.
I entirely agree with you on the annotation of friends and family burning you. That is the very reason I am in the situation I am in now. Although, I could of made different decisions in my recent past to avoid such atrocities, the problem with that is that life appears more unpredictable than the markets. (So I don't blame myself)

I wasn't suggesting that I would withdraw their funds. But thank you for the information.

Where do I get information regarding regulating of these such accounts (I live in the United States)? Are they entirely supplied by a broker (such as Oanda that hilmy83 seems to use [Nocturnal Funds; I assume he is at least a member of this])?
  • #8
  • Feb 12, 2008 2:06am Feb 12, 2008 2:06am
Ok... I wasn't going to mention any particular firm, but.
(I'm gonna regret this I know)

Interactive brokers have a "Friends and Family Advisor" account, that allows you to trade I think up to 15 accounts without having to be regulated.

I say again, check your regulations in your country though, as they say up to 15, but in the UK I think it's less according to FSA regulation.
Carpe Divitiae
  • #9
  • Feb 12, 2008 2:09am Feb 12, 2008 2:09am
I trade for some members of family.

Believe me, there's always pressure!
  • #10
  • Feb 12, 2008 2:10am Feb 12, 2008 2:10am
Quote
Where do I get information regarding regulating of these such accounts
It is YOU or the "entity" you trade as that requires regulation, not the accounts.

If you are us based, you can do and serious about it, do something like the series 3 certification
series 65 is for regulated independant advisors
series 7 if you really wanna kick a**
CTA certs etc.

UK based, the FSA/Sii offer various levels of certification also
Carpe Divitiae
  • #11
  • Feb 12, 2008 2:16am Feb 12, 2008 2:16am
Quoting fsiltd
It is YOU or the "entity" you trade as that requires regulation, not the accounts.

If you are us based, you can do and serious about it, do something like the series 3 certification
series 65 is for regulated independant advisors
series 7 if you really wanna kick a**
CTA certs etc.

UK based, the FSA/Sii offer various levels of certification also
Interesting. I will look in to these! Thanks.

By the way, you say Series 7 is for kicking a**? Please elaborate. xD
  • #12
  • Feb 12, 2008 2:24am Feb 12, 2008 2:24am
Quoting Ilunore
Interesting. I will look in to these! Thanks.

By the way, you say Series 7 is for kicking a**? Please elaborate. xD
Have a read up on it. It's like the mother of all certs to do in the us I think.
I covers just about every security and derivative tradable. Regulation. Risk Management. Investment Management. I don't even know what else, as I'm not US-based.
It's a mountain of work though from what I've seen of the syllabus.

Don't let that put you off though.:
Don't shy away from it just cause of the volume. It is pretty highly regarded as far as I'm told.
Carpe Divitiae
  • #13
  • Feb 12, 2008 2:29am Feb 12, 2008 2:29am
Quoting fsiltd
Have a read up on it. It's like the mother of all certs to do in the us I think.
I covers just about every security and derivative tradable. Regulation. Risk Management. Investment Management. I don't even know what else, as I'm not US-based.
It's a mountain of work though from what I've seen of the syllabus.

Don't let that put you off though.:
Don't shy away from it just cause of the volume. It is pretty highly regarded as far as I'm told.
Volume does not concern me; I am a studying scholar in mathematics. It is the fact that it seems you must be sponsored by a FINRA member firm or an SRO. (I checked on Investopedia.) I am only 20 years old and do not plan on majoring in finance nor applying for jobs at these firms. Not that I do not want to learn, I will be glad to undertake the necessary requirements for such a cert or a cert similar. I'm wondering if it requires a degree of some sort...

Maybe another cert will suit me?
  • #14
  • Feb 12, 2008 2:35am Feb 12, 2008 2:35am
Quoting Ilunore
Volume does not concern me; I am a studying scholar in mathematics. It is the fact that it seems you must be sponsored by a FINRA member firm or an SRO. (I checked on Investopedia.) I am only 20 years old and do not plan on majoring in finance nor applying for jobs at these firms. Not that I do not want to learn, I will be glad to undertake the necessary requirements for such a cert or a cert similar. I'm wondering if it requires a degree of some sort...

Maybe another cert will suit me?
It appears that the Series 65 examination does not require sponsorship. I am going to do some research regarding this exam to see if it matches what I need or at least the start of the endeavor. I will post more information on it soon.

I am sorry if these posts seem off topic for this thread. xD
  • #15
  • Feb 12, 2008 2:35am Feb 12, 2008 2:35am
Quoting Ilunore
Volume does not concern me; I am a studying scholar in mathematics. It is the fact that it seems you must be sponsored by a FINRA member firm or an SRO. (I checked on Investopedia.) I am only 20 years old and do not plan on majoring in finance nor applying for jobs at these firms. Not that I do not want to learn, I will be glad to undertake the necessary requirements for such a cert or a cert similar. I'm wondering if it requires a degree of some sort...

Maybe another cert will suit me?
Aahh, yes, apologies, I forgot about the FINRA sponsorship thing.
Series 65 then. No sponsorship required as far as I know, and nothing's changed in the CFTC's regs.
Carpe Divitiae
  • #16
  • Feb 12, 2008 2:39am Feb 12, 2008 2:39am
Quoting fsiltd
Aahh, yes, apologies, I forgot about the FINRA sponsorship thing.
Series 65 then. No sponsorship required as far as I know, and nothing's changed in the CFTC's regs.
But the question is: Does the series 65 cover what I need (Spot Forex, Forex Options/Futures and Options on Forex Futures).

But hey, it can't hurt to take the exam anyways, eh?
  • #17
  • Feb 12, 2008 2:46am Feb 12, 2008 2:46am
Quoting Ilunore
But the question is: Does the series 65 cover what I need (Spot Forex, Forex Options/Futures and Options on Forex Futures).

But hey, it can't hurt to take the exam anyways, eh?
Dunno dude. I'm on the other side of the ocean! :
Carpe Divitiae
  • #18
  • Feb 12, 2008 2:57am Feb 12, 2008 2:57am
Quoting fsiltd
Dunno dude. I'm on the other side of the ocean! :
I read that the Series 65 is one of the toughest exams... Small chance of success? I'm up for it!

I am going to purchase exam preparatory material soon. Thanks for the heads up on this.
  • #19
  • Feb 12, 2008 3:00am Feb 12, 2008 3:00am
Quoting Ilunore
I read that the Series 65 is one of the toughest exams... Small chance of success? I'm up for it!

I am going to purchase exam preparatory material soon. Thanks for the heads up on this.
No worries. I'm just glad to see someone else is serious about regulation in this industry. A very many aren't. And it is a double-edged sword.
It doesn't only protect your clients and their funds, but also the trader/fund manager/whatever.
Carpe Divitiae
  • #20
  • Feb 12, 2008 3:04am Feb 12, 2008 3:04am
i feel "relaxed" if i trade for myself , but for others, you tend to think many times, afraid of losing trades.
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