Manage OPM (Other People Money)

Hi, this thread is created to discuss/talk about Manage OPM, how to get in touch with investors, what are the good ways to find them, etc.

Please share your ideas and your experiences, if any.

Thank you in advance!

What a perfect timing. I am glad that Tunera started this dsicussion at a time when I am in need of some advice.

Initial accounts always come from friends who have trust in your ability (or have little trust in their own abilities).

My question is, what are the DOs and DON'Ts of managing Other People's Money (OPM)?

Just my 2 cents but friends and business never work.

Thanks.

Kindly receive your payment.
http://tbn1.google.com/images?q=tbn:..._cents_rev.jpg

So... where to find investors?

Investors find you, you've just got to make sure you're prominent enough to be found!

Get some exposure on independant performance tracking websites, show potential investors what you can do.

What about here, a forum full of forex traders and forex investors, most of them not able to make profit.. nobody is looking for some good trader to manage his account ?

Run several free online seminars on how to invest in Forex (or whatever). Highlight the fact that it is a 24 hour a day market, it's hard to find time to sit down and trade, etc etc. Share with them a complex trading strategy to get them really confused and to impress them with your knowledge.

Use something like gotomeeting to run the seminars, it's cheap and works really well.

At no point during the seminar do you mention that you are looking for investors. Let the follow up email that talks about the next free seminar do the talking for you. Provide links to live trading reports, the more recent the better. Give contact info so they can reach you if they are interested.

Run ads on Google to fill seats. Free always brings tons of people so limit the number of seats per seminar.

I have been down this road a little ways. Seems like a common way to start is to begin trading from an institutional account....


http://www.forexfactory.com/showthread.php?p=2972568

The only people I've ever seen offer to trade other peoples money do so cause basically there addicted to gambling they have blown all of there own money so they talk some poor sap into letting them trade his money who then loses most of it as doesn't want to accept they've made a mistake.

So I for 1 won't be going near anyone offering such a service.

Mate lost 30% of his account to some pretender a few years back doing just this, turned out all of the above was true, the trader lost his house and everything desperate to get it back.

Not all traders are the same..

Maybe not, but if your a good enough trader and making loads of money, why do you need someone elses money, thats the question and there is only 1 answer and thats the first statement is likely a lie.

There will be exceptions to this ofcourse, but not 1 I'd be willing to risk.

I'm keeping my lifes saving in my right pocket to buy a Mars bar tomorrow

You forget a simple fact of life though: Not everyone was born with the financial backing necessary to make millions in the markets. For example, there might be a great trader born in Malaysia, to poor parents, but got it together to trade. His account might only be $2000. He is not going to become and multi-millionaire anytime soon. But he still gets 4% a month.

He needs the money to trade because he doesn't have the backing to begin with.

Although I am certainly not saying your scenario doesn't happen either. LOL

Chris

PS - For those of you interested in trading other people's money, I can tell you a lot of people promise a lot of things - few of which ever work out. I have been approached several times by several people, most of which are full of it. I now trade for someone, but to be honest - it took a lot of talking to different people to actually "land this gig".

You've got some strange opinions Turveyd!

Been trading a long long long time in 1 form or another, I've seen this happen 4times and I've seen the lender make money well never as yet.

I can't tell you how to get investors, but I can tell you how I got investors.

About 5 years ago, I met an Emirati through a trading forum. We both lived in Al Ain. We met and we liked each other. We became friends and he introduced me to many of his friends. We'd spend evenings hanging out in shisha shops, shooting the shit about trading and many other things. For me it was a very valuable inroad to understanding this culture and its people.

At the time they were all trading the local markets while I did just fx. After about two years a couple of them asked me to manage their money and I refused. Once the markets in the Gulf tanked, they started asking me more often. Finally, I agreed to manage 200k for one of them in 2007. The important factor for me was I trusted him to not be a pain in the ass and he has lived up to his end of the bargain. He's a perfect investor. He never bothers me at all. We meet for coffee, briefly discuss what's going on with the account and the markets then talk about other things.

At the beginning of this year I agreed to take on another investor, a friend of my client. He knows the rules and he's also lived up to them. I've got over 500k now. I've also got at least 6 more investors lined up. In January I'll be taking on at least another million, possibly two.

Here's what I think is the key. I have NEVER EVER promised them anything other than I will stop trading their accounts IF I lose a certain amount. That's the only thing I've ever told them. I never even allude to making more money, EVER in any form or fashion. I never make excuses for anything, nor do I brag about anything. It's just always the same, it's the business and nothing else.

In the first month of trading OPM I lost 10%, then managed to get back to BE by the end of the month. I was worried my investor would get a bit spooked by losing that much right out of the gate, but he didn't. He did call and ask me how it was going when we hit the 10% DD, and I told him it was going fine, it was all under control. I've never hit a DD like that since, but I'm sure it will happen, but I'll worry about it when it does.

Also, I've never bragged to them about my trading in all these years. When the local markets were going ballistic, people were making fortunes here. They always kept telling me I should be trading the local markets but I never wanted to get near them. Their yearly returns were in the hundreds of % while I was just consistently making small returns.

When it all crashed many of them lost everything. I just kept making my small returns every month and I haven't had a losing month in just over 2 years now (actually July 2007 was the last one). I have had a few BE or I made 0.5%, but I didn't lose money. My monthly DD averages about 3% on the OPM. Last month it was only 1.2% with a 5.4% return. After that hell of a rollercoaster ride they all took in the local markets they've come to appreciate the benefit of slow and steady and they all now know that I'm not going to blow their accounts out. It's what people with money really want, to preserve their capital first and then make some money if possible.

As for friends and family, I'd never trade for family. It's a minefield waiting to go off. You can afford to alienate some friends, but not your family.

As to the naive belief that if you're a successful trader you don't need to manage OPM, that's just an opinion. Anyone with any life experience knows that there are so many variations on human behavior that to try to succinctly capture all of it with a simple one line statement is juvenile thinking at best.

For some people, trading OPM is harder than trading their own money. You'll never know until you try.

In summary, let people come to you. Don't promise them anything other than a limit on what you'll lose. Get one investor and make some money for him. He'll tell people and then they'll come looking for you. It takes time, no doubt, but it's worth it.

Good post, some excellent points!

After all i see in this forum there's too much scepticism, so thank you very much to the ones who contributed with useful informations, and thank you to the others too. Wish you the best

Can anyone recommend some worthwhile ways to attract clients?

IF someone is truely talented, he will never be in need for others!! it is simple fact

moreover, any manager wish to manage others accounts he should prove himself and disclose his live account through ForexFactory trading explorer