Trading by yourself vs Letting someone trade for you

I did some heavy study on forex before and finally created a nice system that I did ok with live trading but I still could become a lot greater than that with more study.

But then I found out about being able to invest in other traders.
They take a cut of the profit.


The pro of doing it on yourself is that... first of all you don't need to share a small cut of your profit with someone.. and you can choose to do high risk trading.. "gambling".. for a short period.

But if you let a trader do it..
1. You don't have to spend a million hours on studying and learning how to trade and the education never really stops even once you are successful you can still continue learning.
2. You don't have to sit in front of the computer boring yourself to death looking at charts several hours per day.

Uhmm, That's it I guess.
But these 2 points are easily worth giving a pro trader a 20% share of your profit imo.

I just want to see what others think about this and why they insist on learning to trade by themselves.

I recently got this urge to become a great trader because so many pro traders sound really dumb when they talk about their system and method.
It makes me wonder how great I could become if they can become so good.

But the trader I'm investing in right now bring in on average 5% per month.
And he has recently gotten a lot better and it's probably even more per month now. He is very safe investment too because he has many years of history and thousands of trades done and has had close to none losing months.

So I really can't make myself stop investing in him and starting to trade on my own because of the pros and cons I've already mentioned.

But this isn't really compatible with your other thread, where you're seeking a 1,000% return

I'm sure you can find someone who can make 5% a month, and you will make 1% a month from your 20% cut, but where is this realistically going to get you to?

And by the way, 5% a month is way more than most published traders make

Good luck

This is not meant to be compatible with my other thread.

And the trader gets 20% cut.. I get 80%

You are no longer a trader when you let others do the work for you.

You're an investor at that point and you need to dive into the study of a bazillion other subjects before going forward as an investor.

For example:
Moral Hazard - Let's say I give you $100 to bet at a casino. If you win, you get 50% of the winnings. If you lose, you get nothing, but it wasn't your $100... how do you think this will affect your trading style?

You say 5% return is high - but at what margin level? Surely at 50X margin, one can expect to earn more than 5% trading actively. Are we talking trading 2 lots with $100k and earning $5k a month on that, or trading 2 lots with $10k and earning $500 on that?

5% is pretty high.. for low risk.. It's possible to go even higher but I think it would have to be a fucking genius to keep an average of 10% with a low drawdown.

I don't see why it matters what my capital is for this thread.

No one has said why they chose to trade instead or let someone trade for you yet but from taking a look at the posts on this forum I THINK it's because 90% of all traders and learning novices think they can make 20-40% monthly roi (or even more) and be able to sustain it long term.
(It is possible I suppose but you would need to have a lethal drawdown and I seriously don't think most traders have the stomach for it once you are trading for anything more than a small part of your monthly paycheck.)

So would you say there is much of a difference between using a signal service and getting someone to trade for you?

I don't know anything about signal services.
I would love if someone could give a comprehensive reply about it and perhaps a few good links in it too.

Good thing I can imagine about it though is that you can decide yourself how much you want to risk.. So you would still need some experience trading.

Sorry, would not prefer to trust someone else to trade on my behalf. But how exactly would that work..do we pay a monthly retainer to the trader for trading/ percentage of profits/both?

look up how hedge funds make their money, then you have your answer.

Well this is how I see it.......

If I trade on my own knowledge and experience I lose (overall) I hate to admit it but that is a fact, I have some good wins but at the end of the year I had less than what I started with.

My RRSP (pension account is managed by my bank and he makes a profit for me every year.

Therefore I deduce that if I leave the trading to an expert I stand a better chance of winning.

I think the margin utilization is important. 5% on 1:1 leverage vs 5% on 50:1 leverage is a huge difference in the ROI on the trades. Unless that's what you were speaking of (5% purely on the trade value, so at leverage it is multiplied - but that would be up to 250%, so I think you meant some middle ground, like 10:1 leverage).

I think you can choose both. You can trade/invest by yourself if only you're interested in trading. IMO 5-6% annually is incredible. You should trust yourself over anyone else.

You can invest in hedge funds if you have a net worth of $1 million. Maybe that is better if you have a pile of money laying around. I wouldn't let a non-professional trader or fund to trade my money though. Most people in the financial industry are scams. Its like a pozzi scheme.

Even if an average joe trader can make 20-30% a year, don't trust them unless they're professionally certified. Check their background and their fund's background before putting a cent in their fund. That's my take in this industry. Don't trust anyone easily.

It's hard to choose between trading the market by yourself or applying the money for a professional investor to do it.
What are your goals in forex market? Do you want to learn about it and become a pro or are you just facing it as a riskable/highly returnable investment?

Hedge funds..sure, when I have 100 K to blow and can write it off, maybe. But given some of the negative reviews, not sure I would be too happy about trusting some corp with it. A hedge fund can report a negative growth, if that's the case how can I be sure that they're not just tinkering with the figures?
And are there any good forex managed accounts out there?

Guess it is about what is your goal?

If my goal is just to make more money I really don't mind letting someone professional trade for me or buy signal.

However if my goal is to to be a better trader then of course you can do the above and learn from it while studying it yourself.

Agree with this.

If We are playinh with big money, better if We use reliable fund manager. At the other side, if we want to learn forex with real account, small money might be worthless

In my point of view, at this time there are many brokerages offering mini account that will be suitable choice if We want to learn forex. Or the second choice is opening a demo account. But base on my own experience, trade using demo account will different with real account (psychological aspect).

Yes, it's true, from a trader you'll become an investor, and that's not trading anymore. But one has to grow up, I mean I lost too much to keep on trading myself. Now I rather trust something or somebody that works instead of trading on my own an losing.

If you have the ability to trade for yourself why would you let some else do it for you? Normally people who let others trade for them are the "rich and busy" people, this is also happens in stock market. But you are just beginning in forex trading, I would recommend to do it by yourself for you to know the real deal.

It is hard to imagine a more stupid or more dangerous way of making decisions than by putting those decisions in the hands of people who pay no price for being wrong.