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Attracting Investor Capital

  • #121
  • Edited 2:34pm Apr 10, 2010 1:40pm | Edited 2:34pm
Your Tax $ Hard At Work....

http://www.cftc.gov/PressRoom/PressR...pr5805-10.html

"Charleston, South Carolina-based Defendants Ordered to Pay More than $3.9 Million in Restitution and Civil Penalties to Resolve 2008 CFTC Anti-Fraud Action"

"The order finds that, from at least October 2002 through January 2007, the defendants fraudulently solicited and accepted more than $1 million from at least 20 individuals to participate in purported commodity pools. The defendants fraudulently misrepresented Peninger’s prior trading success, guaranteed profitable returns and claimed that Peninger’s trading system eliminated the risks of trading commodity futures, according to the order. In addition, the defendants misappropriated pool participants’ funds to pay back pool participants and fund their personal expenses and other business ventures. To conceal their fraud, defendants issued false account statements showing profitable returns and provided false verbal assurances to participants that they were making money, the order further finds."

...looks like a page right out of Madoff.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #122
  • Apr 11, 2010 6:10am Apr 11, 2010 6:10am
Quoting Dopey
Lol, I just went through a 5 month drawdown! If I can make 3-5% per month, everyone is very happy. My clients are very realistic. Besides, they all have money elsewhere being risked at different levels. I guess I'm the safe guy, because even after the 5 month dd, no one was crying about it (except me, of course).
Thanks for the info. Its cool to have realistic investors like u have.
  • #123
  • Apr 13, 2010 2:52pm Apr 13, 2010 2:52pm
2-3% monthly? Hey, Piece o' Cake! (I mean I will steal 3% of your account every month....)

http://www.cftc.gov/PressRoom/PressR...pr5807-10.html

CFTC Charges Florida Resident Claudio Aliaga and His Company, CMA Capital Management, LLC, with Operating a Foreign Currency Ponzi Scheme

"Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced that it charged Claudio Aliaga, of Davie, Fla., and his company, CMA Capital Management, LLC, of Miami Lakes, Fla., with operating a Ponzi scheme involving the fraudulent solicitation of at least $4.5 million from at least 125 individuals to invest in foreign currency (forex) managed accounts and/or a pooled investment.

- - -

Specifically, the CFTC’s complaint charges that, since at least March 2007, the defendants fraudulently solicited and received at least $4.5 million from retail forex customers. During solicitations of prospective customers, Aliaga made fraudulent misrepresentations and omissions of material fact, including 1) stating that he was a successful forex trader, 2) guaranteeing a two to three percent monthly return on funds invested and 3) guaranteeing that there would be no risk to principal invested, according to the complaint. Aliaga is also charged with failing to disclose that not all customer funds were used to trade forex.

According to the complaint, only approximately $1.9 million of the approximately $4.5 million solicited from customers was transferred into forex trading accounts. Aliaga’s trading resulted in overall losses of approximately $673,000. The complaint also charges that Aliaga misappropriated customer funds to benefit himself, his wife and another related business entity. To conceal the fraud, Aliaga issued false account statements to customers reflecting the promised returns based on his purportedly successful foreign currency trading, according to the complaint. Since January 2009, as alleged, defendants failed to make promised monthly payments to customers and to honor customers’ redemption requests of customers.

In the continuing litigation, the CFTC seeks restitution, disgorgement of ill-gotten gains, civil monetary penalties, trading and registration bans and a permanent injunction prohibiting further violations of the federal commodities laws."

Disgorgement of ill-gotten gains - man that sounds painful....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #124
  • Apr 17, 2010 10:20am Apr 17, 2010 10:20am
The human race will always amaze me

I've just seen his picture, and he seems really weird, far too polished to be real. Hindsight is great
  • #125
  • Apr 17, 2010 12:00pm Apr 17, 2010 12:00pm
Quoting The Fool


CFTC Charges Florida Resident Claudio Aliaga and His Company, CMA Capital Management, LLC.....

2) guaranteeing a two to three percent monthly return on funds invested and
3) guaranteeing that there would be no risk to principal invested
lol, I think CFTC should charge the investors with stupidity! 2-3% per month guaranteed, risk free, in retail forex. Yeah, ok
  • #126
  • Apr 17, 2010 12:30pm Apr 17, 2010 12:30pm
Quote
lol, I think CFTC should charge the investors with stupidity!

Agree

Quote
2-3% per month

This is very real and possible to do if you know what you're doing, actually if you do its quite boring.


Quote
guaranteed,

You guarantee only if you're desperate for money, that guarantee should have been the first sign of trouble for any investor.
Even mutual funds which have a hard time making you 2-3% per YEAR don't guarantee you anything.

Quote
risk free, in retail forex. Yeah, ok

Nothing is risk free, not even a walk in the park, another warning sign.
Therefore, you're so correct on the first statement.

Good trading
  • #127
  • Edited 4:55am Apr 22, 2010 2:37am | Edited 4:55am
http://www.elitetrader.com/vb/showth...threadid=26648

http://www.opalesque.com/

http://richard-wilson.blogspot.com/

http://www.iinews.com/site/pdfs/IIMa...tsisFriese.pdf

http://www.pfsglobal.com/clientlogin.html
"If The Fool persists in his Folly he will become wise." - William Blake
  • #128
  • Apr 22, 2010 12:07pm Apr 22, 2010 12:07pm
Thanks Fool

Interesting links

Have you set up your business anywhere yet?

I'd be curious which broker you chose.



R
  • #129
  • Apr 22, 2010 2:20pm Apr 22, 2010 2:20pm
Quoting endroute
Why freaking bother trading john and jane doe's money when you can just as easily trade your own. The joy of trading is not having clients or employees.
The more aggressive we are in our own trading, the less investor capital is worth. I've seen drawdown of 5% mentioned here, which to me is quite ridiculous. It requires a trade size that wastes good opportunities, and I imagine I'd have to drop to between a quarter and a half of a percent risk per trade to satisfy DD requirements. That means I'd need 20-40x more investor capital than my own to make a similar amount, and I imagine I'm far more likely and much sooner get to a few mil of my own, than 50-100 of insto capital.
  • #130
  • Apr 22, 2010 2:34pm Apr 22, 2010 2:34pm
Quoting Mr J
The more aggressive we are in our own trading, the less investor capital is worth. I've seen drawdown of 5% mentioned here, which to me is quite ridiculous. It requires a trade size that wastes good opportunities, and I imagine I'd have to drop to between a quarter and a half of a percent risk per trade to satisfy DD requirements. That means I'd need 20-40x more investor capital than my own to make a similar amount, and I imagine I'm far more likely and much sooner get to a few mil of my own, than 50-100 of insto capital.
That's a weak argument when you consider the wealth of people like Buffett and Soros et al.
  • #131
  • Apr 22, 2010 2:39pm Apr 22, 2010 2:39pm
Quoting Mr J
The more aggressive we are in our own trading, the less investor capital is worth. I've seen drawdown of 5% mentioned here, which to me is quite ridiculous. It requires a trade size that wastes good opportunities, and I imagine I'd have to drop to between a quarter and a half of a percent risk per trade to satisfy DD requirements. That means I'd need 20-40x more investor capital than my own to make a similar amount, and I imagine I'm far more likely and much sooner get to a few mil of my own, than 50-100 of insto capital.
I think it depends on how you approach your investors and whom you accept.
I completely agree with you on the risk/DD issue.
I trade some managed accounts but I tell everyone from the start that I will trade just like I trade my own funds. The moment they don't like something they are free to leave.


R
  • #132
  • Apr 22, 2010 2:42pm Apr 22, 2010 2:42pm
Quoting robertw
Have you set up your business anywhere yet?

I'd be curious which broker you chose.
Hi there,

No, not yet - it s gonna be a while b4 I get very formal. I am taking the Series 3 & 34 this summer. Will probably start to trade some investor funds this summer but these will be folks I already have strong business ties with & it can be done relatively informally - & will be pretty small to start & under regulatory thresholds.

I'd like to see how the new/proposed regs affect the industry. It only seems like it will get harder but time will tell.

I demo traded on the Citibank platform, which is the same as SaxoBank's & I didn't like it much - but as I evolve away from scalping the platform gets to be less important to me it seems.

Ultimately I will need (ideally) a place I can trade futures, options, equities, & forex from - and currently I have different brokers for all four. So, yeah, as you may imagine I am way down on the learning curve and its not an easy climb, just learning here & there on the internet - but what else is new? It does not help that the whole derivatives trading industry is in the midst of some serious evolution...

Anyway, IB seems to be a popular choice. Global Futures might be a good place to start for me. I might do managed accounts only in Fx to start & stick with Oanda....

Are you operating a pool or a fund or something robertw? If so, where are you trading, how are you organized, etc?
"If The Fool persists in his Folly he will become wise." - William Blake
  • #133
  • Apr 22, 2010 3:07pm Apr 22, 2010 3:07pm
Quote
Are you operating a pool or a fund or something robertw? If so, where are you trading, how are you organized, etc?

Thanks for the response

I'm managing few accounts under PAMM at Kingdom Forex but looking to diversify and open a second PAMM account at a more established broker, hence my question.
I don't have any licenses and it seems that some of the larger players (brokers) would prevent me from taking clients from some countries that require their own licensing. I have been trading for myself and fees from managed accounts are just an added bonus so I do not plan to go through any exams at this time.
If the regulation starts squeezing me I'll either 1) find a way around it and clients will need to accept that 2)Accept the regulations and get the piece of paper on the wall 3) Quit trading for others and just trade for myself.
In order of likelihood its 1-3-2.


If you're looking for a solution to trade many markets in one, Interactive Brokers is one solution, I think they offer almost everything out there. I tried them for forex but it didn't work out for me at 1:40 leverage, their platform takes time getting used to but what can you expect from something designed to trade so many different instruments.
However, down the road I have a similar plan as you to trade multiple markets. Or should I say cherry pick my trades from a larger basket of opportunities.

Good Trading
  • #134
  • Edited 3:25pm Apr 22, 2010 3:12pm | Edited 3:25pm
Quoting Mr J
The more aggressive we are in our own trading, the less investor capital is worth.
I would not want to invalidate anything you say Mr. J - and to each his own. And I have been daytrading live for exactly 1 year, so wtf do I know? In that 1 year I learned to trade aggressively and realized I could make and also lose money quickly. I also learned, and this I did not really anticipate, that there is a real burn-out element inherent in aggressive trading. So there is some handwriting on the wall - and what the sign says on your wall may be different but ok fine: I would rather trade very conservatively from a large base than aggressively from a small one. Also, I may be able to trade well across several markets and in time I might become a great trader, but I am late to the game & there are guys young enough to be my sons who can probably do alot better, who can bring some skills to the table (like C++ programming - it hurts my head when I think I need to relearn that, like CPA's, etc) - and those guys should be working for me.

If you are not making money hour by hour while you are away on vacation in Costa Rica then you do not have a business, you have a J-O-B. The kind of money that will come to & stay with you if you can consistently gain even 1% per month is just mind boggling. I'd say its worth a shot. Probably a long shot in my case but we'll find out. Or I will anyway...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #135
  • Edited 3:42pm Apr 22, 2010 3:27pm | Edited 3:42pm
Quoting pipmutt
That's a weak argument when you consider the wealth of people like Buffett and Soros et al.
I consider the weakness to be my money or OPM. No reason not to do both. I plan to at some point.

Quoting robertw
I think it depends on how you approach your investors and whom you accept.
I completely agree with you on the risk/DD issue.
I trade some managed accounts but I tell everyone from the start that I will trade just like I trade my own funds. The moment they don't like something they are free to leave.
I'd do just that if the money was pooled, but why if they're separate accounts? I can understand making the same trades, but if they're different accounts, using different risk levels shouldn't be an issue? Other than that I think I'd have a similar attitude. I would really only want significant clients who can handle the experience.

Quoting The Fool
I would not want to invalidate anything you say Mr. J - and to each his own
Feel free. I like to think I know a little about trading, but I know nothing about managing and trading OPM.

Regarding aggressive trading, it's not the entries that are aggressive, but the overall position. My build large postions very quickly off very tight entries. The loss on a trade is small, but the drawdown on a large position can be 10%+, even though the position may have been extremely profitable. This is where the drawdown really hurts me, because I will experience a significant drawdown at the end of every good position, unless I scale out before price moves against me.

Quote
The kind of money that will come to & stay with you if you can consistently gain even 1% per month is just mind boggling. I'd say its worth a shot.

I'm sure, but then one of my points in this thread is that someone who earns just 1%, needs OPM more than someone who can make 10% . The better you are, the less you need OPM. Both are good though.
  • #136
  • Apr 22, 2010 3:52pm Apr 22, 2010 3:52pm
Quoting Mr J
I'm sure, but then one of my points in this thread is that someone who earns just 1%, needs OPM more than someone who can make 10% . The better you are, the less you need OPM. Both are good though.
Swing for the fences in the little leagues as long as you can but if you want to move up to the big show make sure you can bunt.

Sorry....I love baseball....
"If The Fool persists in his Folly he will become wise." - William Blake
  • #137
  • Apr 22, 2010 4:08pm Apr 22, 2010 4:08pm
Little league is pretty appropriate for me. I've got a long way to go, but I like to think ahead. Bunt. How unsexy. What's a 20% drawdown if the account is up 200%? I really hope that I don't have to put up with such anal drawdown requirements. Then again, if I'm in a position to put up with it, I've been trading well.
  • #138
  • Apr 22, 2010 4:18pm Apr 22, 2010 4:18pm
Quoting Mr J
Bunt. How unsexy.
Even the slightest hint of excitement is a red flag to me anymore.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #139
  • Apr 22, 2010 9:27pm Apr 22, 2010 9:27pm
Just like with everything in life you have to use common sense - does not matter whether you trade yours or client's money.
Its still money and if you loose the game is over.
Some people think that I trade with higher risk but they don't know what I base my trades on.
I think there is more risk associated with lack of experience and knowledge then with someone who has that and uses a higher leverage.
Unfortunately most "traders" spend their time chasing EA after EA then learning to trade.

R
  • #140
  • Apr 23, 2010 12:42am Apr 23, 2010 12:42am
Quoting The Fool
The kind of money that will come to & stay with you if you can consistently gain even 1% per month is just mind boggling.
Absolutely, I mean you only have to look at someone like Madoff, how much did he have under management, ~$20bn? Even at the 1-2% returns he was offering some people were skeptical whether it was legit, and there were some very sophisticated investors among his victims.

Consistent returns with minimum risk is what these people look for, they'd run a mile if the manager suggested he could produce returns of 10% per month!
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