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The Absent Minded Investor - Adventurous Forex Trading Tales 32 replies

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Attracting Investor Capital

  • #161
  • Apr 23, 2010 2:55pm Apr 23, 2010 2:55pm
he he har har

Quoting pipmutt
lol, and leave $490k in change I imagine
Annoying Precision
  • #162
  • Apr 23, 2010 6:48pm Apr 23, 2010 6:48pm
Quoting erikte279
I'm learning mql now and I'm FINALLY going to be able automate my "idea" . I worked for months developing the method and backtesting it...its solid...very solid....
no serious fund will touch you or your method unless it's been forward tested for six months or more.

m
  • #163
  • Apr 24, 2010 6:27pm Apr 24, 2010 6:27pm
Quoting daytrading
OPM
$25million X 1% (per month) = $250.000 X 20% = $50.000 (per month)

Own Cash
$100.000 X 10% (per month) = $10.000 (per month)

I know which one I'd go for.

Keeping in mind that producing 10% pm (or 120% per annum) on a consistent basis (over years) is kind of unrealistic to put it mildly.


regards
daytrading
It seems the downside to this would be the "customers" who need to be filled in on every move you make. Adds stress I would think.

However, one positivie would be protection against utter failure. If you trade your own money, and for some reason your system breaks down, there is a possibility you could blow your entire account and lose years worth of profits. Trading OPM, if you blow the account, you really are blowing other peoples account. Sure, you just lost a job and your reputation, but you should still have a good part of your money assuming it wasn't all tied into that account.

I know this isn't the best line of thought if considering trading OPM, but still...
All I ask for is a chance to prove that money cannot make me happy.
  • #164
  • Apr 24, 2010 7:44pm Apr 24, 2010 7:44pm
Quoting Marsh
I know this isn't the best line of thought if considering trading OPM, but still...
The talent for understatement is hard to find these days.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #165
  • Apr 25, 2010 1:21am Apr 25, 2010 1:21am
Quoting The Fool
The talent for understatement is hard to find these days.


Understatement for sure, but some people actually think that way, it's not their money so they may as well go for it, to heck with risk!
  • #166
  • Apr 25, 2010 7:04am Apr 25, 2010 7:04am
Haha, nice one Fool.

I think most people would would initially consider trading other people money for the reasons daytrading mentioned: you simply make more money. However, lets all not be ignorant here. Before the decision is made you weight all the costs and benefits. It is BENEFIT that you are not risking YOUR money, but someone elses. That is just the truth.

If I knew more about this I might even argue that this mindset is used by many traders, including banks and/or hedge funds. This is perhaps what allows them to take on the risks that they do. So it is not just SOME people who consider this, but perhaps is a common mindset.

For example, when LTCM collapsed, did the owners still walk away with millions of their own dollars, or was everything lost? I don't know much (or anything) about LTCM, so perhaps it is a bad example? Either way would be interesting.

Marsh
All I ask for is a chance to prove that money cannot make me happy.
  • #167
  • Apr 25, 2010 8:20am Apr 25, 2010 8:20am
Quoting Marsh

If I knew more about this I might even argue that this mindset is used by many traders, including banks and/or hedge funds. This is perhaps what allows them to take on the risks that they do. So it is not just SOME people who consider this, but perhaps is a common mindset.
I imagine bank and hedge fund traders have limits on the amount of risk they're allowed to take, mind you how effective they might be is debatable when stories about rogue traders keep coming out!

Independent fund managers have clients to answer to directly, and private clients tend to monitor their investment and manager closely, even more so nowadays.

Most good managers work on the premise that it takes a long time to build up a good reputation and no time at all to ruin it, besides which managing money is lucrative enough without the need to take on excessive risk so why do it.
  • #168
  • Apr 25, 2010 2:20pm Apr 25, 2010 2:20pm
Quoting pipmutt
I imagine bank and hedge fund traders have limits on the amount of risk they're allowed to take, mind you how effective they might be is debatable when stories about rogue traders keep coming out!
You are walking home in the City one evening and you come upon a guy slumped over on a Park bench. A drunk, probably, you think, but as you get closer you see that its a well dressed older guy and he's bleeding from his head - he's been beat up - maybe robbed. Do you: A) stop to see if he is alive/ok, call 911, and stick around til the cops get there or B) keep walking, you can't afford to get involved, or C) look around stealthily and then rifle his pockets, check to see if they got his Rolex.......?

Well, you make it back to your building & get in the elevator. Whats this? - you notice somebody has dropped their wallet on the floor in the elevator, just you and this lost wallet in the lift. It is skewed kind of open and you can see a nice thick sheaf of Benjamins in there. Do you: A) Pick up the wallet and return it to its owner (if you know him) or to the concierge, or B) leave it there & go on your way, or C) bend down & quickly extract the cash from the wallet & pocket it before leaving .......?

Wow, what a night. You get up the next day and hustle off to work at your J-O-B. (Let's say you're an engineer - I don't know anything else.) You get in and the phones are ringing and there's a pile of "Call Me's" on your desk. Uh-oh. Oh shit. There's a blow-up on one of the construction projecs that the firm engineered. Somebody made a mistake and left out some critical information from the specifications - and that somebody is you. A big part of the work is going to have to be revised and no progress can be made until that happens. This mistake is going to cost hundreds of thousands of $. Do you: a) Stay cool, immediately own up to your obvious mistake, and start working on how to make it right so the project can keep moving with minimal cost overrun and delay, or b) concentrate on covering your ass & figuring out a way to shift blame to the contractor, or C) quietly slip out of the building and turn off your cell phone....?

If you did not answer (A) to all of the above then you probably should not be trusted trading OPM. There are alot of possible financial benefits to trading OPM & these have been discussed. But beyond that, it is a way for you to provide a service to other people, as well. If you have no interest in or capacity for being of service to other people and pretty much just want to get your hands on their money, then everybody is going to be better off if you just stick to trading for yourself alone.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #169
  • Apr 25, 2010 2:36pm Apr 25, 2010 2:36pm
Quoting The Fool
You are walking home in the City one evening and you come upon a guy slumped over on a Park bench. A drunk, probably, you think, but as you get closer you see that its a well dressed older guy and he's bleeding from his head - he's been beat up - maybe robbed. Do you: A) stop to see if he is alive/ok, call 911, and stick around til the cops get there or B) keep walking, you can't afford to get involved, or C) look around stealthily and then rifle his pockets, check to see if they got his Rolex.......?

Well, you make it back to your building...
a) Maybe he can return the favour some day, he'll owe me one
a) Same as above, plus there will probably be a reward
a) Worst way I'll get some overtime but I might be able to 'engineer' it so that it's someone else's fault, but being such a nice guy I'll take the blame for him and he'll owe me one too!

Every cloud has a silver lining, we just have to exploit situations as they arise.
  • #170
  • Apr 25, 2010 2:43pm Apr 25, 2010 2:43pm
Quoting The Fool
If you did not answer (A) to all of the above then you probably should not be trusted trading OPM.


1.

2. Where did you get all these scenarios?
  • #171
  • Apr 25, 2010 2:50pm Apr 25, 2010 2:50pm
Quoting robertw
1.

2. Where did you get all these scenarios?
It's Sunday - I came up with this rather than my usual sermon.

No, actually all have happened to me. I took the money and ran!

Just kidding, I'm good.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #172
  • Apr 25, 2010 2:54pm Apr 25, 2010 2:54pm
Quoting The Fool
It's Sunday - I came up with this rather than my usual sermon.

No, actually all have happened to me. I took the money and ran!

Just kidding, I'm good.
lol
  • #173
  • May 5, 2010 4:31pm May 5, 2010 4:31pm
http://www.cftc.gov/PressRoom/PressR...pr5818-10.html

Federal Court Orders More than $3.8 Million in Sanctions against North Carolina Defendant Tyrone McCall and Two Entities He Controlled to Settle a CFTC Anti-Fraud Action


"The court’s order finds that, between September 2003 and March 2008, McCall fraudulently solicited and accepted about $1.2 million from commodity pool participants by making false promises of high returns with no risk of loss of their principal. McCall told prospective pool participants that he made money by keeping the difference between the promised (18 percent or greater) return and the high (36 to 40 percent) returns he generated from trading, but these statements were false, the orders find. McCall, individually and as an agent of MBG and MBG Global, misappropriated pool participants’ funds by either using money deposited by new pool members to pay off other pool participants in a manner similar to a Ponzi scheme and/or using participants’ money for his personal use, the orders find.

The court’s order and judgment further find that, as part of this fraudulent scheme, McCall misrepresented his background and expertise by falsely stating that he had an illustrious career on Wall Street with a major investment bank to trick his victims into believing that he was a successful commodity trader. However, the orders find, McCall consistently lost money on his trading activities.

McCall is currently serving a five to seven and one-half year sentence at the Albemarle Correctional Facility in New London, N.C."


mmh, mmh, mmh, Tyrone back in jail.

These things all start to sound the same after a while...
"If The Fool persists in his Folly he will become wise." - William Blake
  • #174
  • May 5, 2010 4:53pm May 5, 2010 4:53pm
Fool

You keep finding these articles I have a feeling you're trying to discourage yourself from trading OPM.

Have a live track record verified/audited, tell your true story, don't promise anything and people will still ask you to trade for them (if the record is good) and you won't have any problems.

P.S. Don't touch their money, just trade sub-accounts.

R
  • #175
  • May 5, 2010 7:07pm May 5, 2010 7:07pm
Quoting robertw
Fool

You keep finding these articles I have a feeling you're trying to discourage yourself from trading OPM.
lol hey that might not be so hard to do even without the CFTC....

No, actually I keep trolling the CFTC website in hopes there might be some news on the margin cap rule. That will make a difference to small fry like me.

The enforcement notices are just good for comic relief.
"If The Fool persists in his Folly he will become wise." - William Blake
  • #176
  • May 5, 2010 7:17pm May 5, 2010 7:17pm
Quoting The Fool
lol hey that might not be so hard to do even without the CFTC....

No, actually I keep trolling the CFTC website in hopes there might be some news on the margin cap rule. That will make a difference to small fry like me.

The enforcement notices are just good for comic relief.
LOL

ehh, we'll just move the accounts oversees if they don't want our money here.
You can only ask someone so many times to take your money.

R
  • #177
  • Jun 19, 2010 11:44am Jun 19, 2010 11:44am
Noticed my posts in this thread contained quite a bit of contempt for OPM. Anyway, I'd like to hear advice on any adjustments needed when switching from retail trading to trading for a fund. Also, I aim to start my own fund at some point, and I'm looking for the best way to prepare for it. How should I track my own performance while trading on behalf of a fund?

A potential problem for me is that I pyramid, so I find "max drawdown" counter-productive. The nature of pyramiding is that the largest drawdown happens at the end of a move, so trying to limit that end-drawdown means limiting the profit before it. If someone gave you a choice of getting $100 and giving $10 back, or getting $50 and giving $5 back, which would we choose? Obviously the $100, but in my observation people tend to overeact to shorterm events (in this case the drawdown) and lose sight of the big picture (the overall great result).
  • #178
  • Jun 21, 2010 1:19am Jun 21, 2010 1:19am
Quoting Mr J
Noticed my posts in this thread contained quite a bit of contempt for OPM. Anyway, I'd like to hear advice on any adjustments needed when switching from retail trading to trading for a fund. Also, I aim to start my own fund at some point, and I'm looking for the best way to prepare for it. How should I track my own performance while trading on behalf of a fund?

A potential problem for me is that I pyramid, so I find "max drawdown" counter-productive. The nature of pyramiding is that the largest drawdown happens at the end of a move, so trying...
I think they are right Pyramiding might be successful for some but it's very dangerous. But you can limit the risk by limiting the number of times you do the pyramid.
  • #179
  • Jun 21, 2010 2:18am Jun 21, 2010 2:18am
Quoting Intensity
I think they are right Pyramiding might be successful for some but it's very dangerous. But you can limit the risk by limiting the number of times you do the pyramid.
Of course it's limited, otherwise it would lead to extreme positions such as 20% swings on a single cent of movement! Pyramiding probably isn't an issue, and I suppose I'm just complaining about the oversimplistic view that most investors seem to have, but their money, their rules.
  • #180
  • Jun 21, 2010 4:53am Jun 21, 2010 4:53am
Drawdown is drawdown, regardless of how you get there. And if you are willing to accept a certain % dd, then you are necessarily willing to accept the same % loss, at least. Luckily, it is not necessary to incur large drawdowns in the pursuit of healthy, consistent returns. Is this not what any prospective investor wants to hear?
"If The Fool persists in his Folly he will become wise." - William Blake
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