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starting a trading house

  • #1
  • First Post: Mar 15, 2009 12:07am Mar 15, 2009 12:07am
does anyone have any insight in starting your own trading "company" and training people how to trade.

then, once they do it successfully they pay you like 95% of the profits they make for you for a pre-agreed upon length of time? i'd think people working a low-paying job would love the chance to be salaried + get bonuses on profits they make every day (contingent on the ability that they can actually make $)

seems like it would be pretty profitable if you had your workers trading for you 24/7 . id assume you'd also need a lawyer on hand to make sure these people don't learn and run and also disguise all of your indicators+strategies so they cant just steal your method and pass it onto the internet

any comments or feedback greatly appreciated
  • #2
  • Mar 15, 2009 12:46am Mar 15, 2009 12:46am
Quoting msushi
does anyone have any insight in starting your own trading "company" and training people how to trade.

then, once they do it successfully they pay you like 95% of the profits they make for you for a pre-agreed upon length of time? i'd think people working a low-paying job would love the chance to be salaried + get bonuses on profits they make every day (contingent on the ability that they can actually make $)

seems like it would be pretty profitable if you had your workers trading for you 24/7 . id assume you'd also need a lawyer on hand...

1) Well First off you would need a lot of capital.
2)You may need a securities license, it maybe just a series 63. Even if you are not using others money you still are hiring traders. (cost is for test and books - under 500.00 US)
3) You can set it up similar to a hedge fund.
4) Set up a corp structure for liability, an S-corp will do.
5) Set up shop somewhere, try having all your traders in one location to watch over them. They will be using your capital and may be not look at the risk involved if they loose it all since it is not theirs.
6) This should be at the top consult a lawyer and tax planner.
7) File what ever paperwork is needed for your jurisdiction and have lawyer look it over.
8) Develop a system that works.
  • #3
  • Mar 15, 2009 12:54am Mar 15, 2009 12:54am
Quoting SeanBG
1) Well First off you would need a lot of capital.
2)You may need a securities license, it maybe just a series 63. Even if you are not using others money you still are hiring traders. (cost is for test and books - under 500.00 US)
3) You can set it up similar to a hedge fund.
4) Set up a corp structure for liability, an S-corp will do.
5) Set up shop somewhere, try having all your traders in one location to watch over them. They will be using your capital and may be not look at the risk involved if they loose it all since it is not theirs.
6)...
thanks for your reply.... I will only be using my own $ in this venture

technically im not hiring traders since i am hiring minimum wage people to trade for me so would i still need to get the respective licenses?

trading system is covered as well as capital

how much paperwork is needed to setup this company as something like a hedge fund (won't be accepting other people's money)?

what are the average lawyer/accountant salaries in doing this kindof work?
  • #4
  • Mar 15, 2009 11:38am Mar 15, 2009 11:38am
Dude, outsource the trading to the Indians. You can pay them even less. Or even better, try the Bangladeshi's, they're about 3 times cheaper than the Indians.
  • #5
  • Mar 15, 2009 12:39pm Mar 15, 2009 12:39pm
Prop Trading, Private Trading Company, or a Hedge Fund?
  • #6
  • Mar 15, 2009 1:12pm Mar 15, 2009 1:12pm
probably will want a private trading company.


ive never talked to a bangladeshi before lol. do they speak english?
  • #7
  • Mar 15, 2009 3:21pm Mar 15, 2009 3:21pm
Quoting Dopey
Dude, outsource the trading to the Indians. You can pay them even less. Or even better, try the Bangladeshi's, they're about 3 times cheaper than the Indians.
Only problem with that is control over the money. As the owner / operator he will need to have full control. That is why having them all in one place is ideal. He will be aware of their actions.
  • #8
  • Mar 15, 2009 3:23pm Mar 15, 2009 3:23pm
Quoting msushi
thanks for your reply.... I will only be using my own $ in this venture

technically im not hiring traders since i am hiring minimum wage people to trade for me so would i still need to get the respective licenses?

trading system is covered as well as capital

how much paperwork is needed to setup this company as something like a hedge fund (won't be accepting other people's money)?

what are the average lawyer/accountant salaries in doing this kindof work?
But even hiring minimum wage people may still classify as traders. I would defiantly talk to a securities lawyer. They would have all the latest info or should be able to tell you where to get it. What state are you in?
  • #9
  • Mar 15, 2009 3:25pm Mar 15, 2009 3:25pm
Quoting SeanBG
But even hiring minimum wage people may still classify as traders. I would defiantly talk to a securities lawyer. They would have all the latest info or should be able to tell you where to get it. What state are you in?
that's what i was planning to do anyways (talk to a securites lawyer)

i am in CA but probably will incorporate in nevada
  • #10
  • Mar 15, 2009 3:56pm Mar 15, 2009 3:56pm
Quoting msushi
that's what i was planning to do anyways (talk to a securites lawyer)

i am in CA but probably will incorporate in nevada

Yeah I am not sure about how CA does things, I have always been an east coast person. You may also look at doing an International Business setup. There are certain Federal tax benefits for that.
  • #11
  • Mar 15, 2009 4:05pm Mar 15, 2009 4:05pm
Quoting SeanBG
Yeah I am not sure about how CA does things, I have always been an east coast person. You may also look at doing an International Business setup. There are certain Federal tax benefits for that.
yes ill have to take care of that when the time comes....
CA tax is very very expensive so by incorporating in nevada (similar to a delaware corp or LLC) I'd save a lot of $
  • #12
  • Mar 15, 2009 6:44pm Mar 15, 2009 6:44pm
Why risk money on other people. I can see no benefit in employing other people to trade for you. Especially if they have no clue about trading. I wouldn't trust 99,9% of the people on FF with my money.
Also no one will give away 95% of earnings to you.
10 amateur traders are not better than 5. They will not max 2x. the money.
I'd rather trust a computer than someone who has no trading experience.
  • #13
  • Mar 15, 2009 7:00pm Mar 15, 2009 7:00pm
so you expecting people on minmum wage to trade for you and make you heaps of profits for a 5% bonus and not expect them to trade for themselves?
Grabbing the bull by the horns!
  • #14
  • Mar 15, 2009 7:36pm Mar 15, 2009 7:36pm
Hey.... he's from califonicatia, what do you expect
Same Whore .... Different Dress
  • #15
  • Mar 15, 2009 7:38pm Mar 15, 2009 7:38pm
I'm trying to decide if this thread is a parody or not...
  • #16
  • Mar 15, 2009 7:45pm Mar 15, 2009 7:45pm
Quoting Rabid
I'm trying to decide if this thread is a parody or not...
i actually have a different FF screenname on here that has a lot more posts so im not a noob . just have to hide my ideas from people who might be spying on me that's all

trading system is profitable and sustainable. however, I will "disguise" it as best as possible so they can't just learn from me and run

this system is hard to "automate" or else i'd just make a couple EAs and not have to deal with all of this trouble
  • #17
  • Mar 15, 2009 8:01pm Mar 15, 2009 8:01pm
Quoting msushi
i actually have a different FF screenname on here that has a lot more posts so im not a noob . just have to hide my ideas from people who might be spying on me that's all

trading system is profitable and sustainable. however, I will "disguise" it as best as possible so they can't just learn from me and run

this system is hard to "automate" or else i'd just make a couple EAs and not have to deal with all of this trouble
wow. not sure what I consider worse. This thread or openly admitting to violating terms of use for this web site.
  • #18
  • Mar 15, 2009 8:03pm Mar 15, 2009 8:03pm
Ok, so you're being serious...

Profitable system or not, I'm thinking that won't be your big issue.

Prop trading firms have very specific methods for everything you've listed, however most of the "here's my system, now trade it" approaches never work. In order for a trader to work out, they have to psychologically earn their success. It's never as simple as "ok, do this and make money."

As for whether "minimum wage traders" count as traders, of course they do. If they're pushing buttons that execute trades, then they're traders. You're going to have a lot of people learn your method and then leave if they're profitable. You would need a non-compete in order to stop that, but non-competes may or may not be enforceable in this situation.

If they're not trading other people's money then they won't need a formal license. And of course no trader is ever going to "work 24/7" as that's not humanly possible. You could offshore the work, but in doing so you lose control over the money, the method and any proprietary materials you have, along with having essentially no recourse if they screw you.

About the closest control you could get is to design a black box alert, train people on the discretionary factors, get a building and keep them in-house. In this market you might be able to keep employees, but once things improve... nobody loyal ever works for minimum wage. Very few would work for under $10 an hour, and those'll just be kids out of college.
  • #19
  • Mar 15, 2009 8:22pm Mar 15, 2009 8:22pm
Quoting Rabid
Ok, so you're being serious...

Profitable system or not, I'm thinking that won't be your big issue.

Prop trading firms have very specific methods for everything you've listed, however most of the "here's my system, now trade it" approaches never work. In order for a trader to work out, they have to psychologically earn their success. It's never as simple as "ok, do this and make money."

As for whether "minimum wage traders" count as traders, of course they do. If they're pushing buttons that execute trades, then they're traders. You're...
whoops didnt know you were only allowed to have 1 username here...

my method is basically a way of looking at s/r however the indicators will be hidden and disguised as well as possible so the people can't really "steal" the idea since the only thing they could possibly learn about is price action lol and not the entire method

i was thinking that i have people start out at minimum wage, and then when they actually become more and more successful their base pay will get bumped up and their "bonuses" will also be bumped up

im not looking for 1 person to do it 24/7 but looking for a bunch of people to trade at all different "shifts". so, it might end up that the most successful people (who have been allotted a high equity account) come in for 1 hr a day (at all times) and then go home after they earn some pips and get a "bonus" from the positive pips that they've made

what other ideas/comments come to your minds when you think about this guys? keep them coming
  • #20
  • Mar 15, 2009 8:47pm Mar 15, 2009 8:47pm
Can you make money trading? If not, then how are you going to teach these people. And trust me, at minimum wage, you aren't going to get people to care about your money at all.

And by the way, yes you would still need the series (whatever) if you are using poor people - they are still people.

This has to be a parody thread, there is no way anyone could be serious with questions like this.
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