Is it worth it to trade for others?

I've been trading little over 6 years. My performance of the last 1.5 years have been consistent enough that I was able to withdraw profits to supplement my income.

Some of my friends and relatives know I trade. And being a blabber mouth, i also told them about how much i've made in the last few months. They've asked me to trade for them.

For those who manage money for other people

1. Is it a lot more stressful than when you were just trading your own account? How you handle that stress?
2. WHat broker do you use? Are your orders executed same as before?
3. How many people and if it's ok, what is the approximate capital you manage?

My fear is that my system may stop working if i trade too big- or that my broker (oanda) may do something fishy -they've been good so far though.

It's stupid i know, but i'v been kicked in the ass by this forex market that i really don't want to go back to the 'losing days' if i trade other people's money.

I have 4 other people I trade for. These are primarily my friends and they know they might loose all their money. That makes it comfortable for me to trade. I refused a fifth one, I want it to stay comfortable. I'm with Oanda as well.

I know oanda ended their fxmanager. YOu just pooled the money into single account? do you have trouble figuring out people's ownership from withdrawls/deposit and taxes?

If you've been profitable/consistent 1.5 years, give it a go. Maybe start small. One or two people max. Make sure they have NO access other than withdrawals/deposits. Preferably they're not traders themselves.

I've traded for people a few times. All of which were disastrous. The first time was purely psychological. I went from being extremely profitable/consistent for a couple of years to being dumber than dirt almost over night once I got handed someone else's keys. That was probably 10 years ago.

The other 2 times were disasters because the people kept getting in screwing up the trades. Removing stops or taking profits too soon or whatever. Maybe 6 years ago? It's all a blur.

My downfall was being focused on the money. All of a sudden -20 pips was 5 times bigger in dollar amount. Then there was the guilt when there was a loser and the urge to get it back.

Do you think you'll adjust fine to that? How well do you adjust when you increase your own trading amount?

I believe you also need to ask yourself why you trade. The short answer is "the money" but there could be deeper reasons also.
Are you going to trade other people's money as a favour? Do you take a percentage of the profit? Do you take part of the loss also?
I see it as a difficult relationship with friends. You could screw up some friendships here. The friends partners could start getting in their ear about the money......
There is a huge trust issue here.

Best to keep business and friendship separate unless you are a ruthless bastard prepared to burn relationships if they go wrong.
What about teaching the friends how to trade and let them enjoy the experience for themselves.

Hey guys. On Jan 1st, 2013, it's about to become a whole different ball game for those of us that are in US.

New NFA rules strictly prohibit trading opm, with the exception of family, and even then I believe there are limits.

The new requirement states that you must file a disclosure document with NFA. The process can take several months to complete. Best case, about 3 months.

This is only the 1st of several documents needed. However, it is usually the most expensive. Most atty firms will charge you about $15k (Up Front) to initiate the process and can run up to in excess of $40K +.

The NFA is (contrary to popular belief) not too difficult to deal with. Yes the rules are the rules, with no exceptions, however they will work with you and make certain you get all the help, and time you need to comply.

I've checked around and only found a few places where this compliance can be done for less then what was mentioned above. I called around and asked key questions (a friend runs a hedge fund so he gave me some pointers) and found very few less expensive businesses that knew what they were talking about.

My conclusion: For approx $3k you can get it done right, but it does take time as I mentioned above. If you're serious and have potential for good income, then it's well worth it to spend the money, as should NFA a whiff of you working outside their guidelines, fines will be brutal. (And all it would take is one unhappy client shooting his mouth off) From my understanding, fines could be even more then paying the big bucks to a high price law firm to get your proper paper work filed.

Hope this helps.

i started my CTA business using http://www.balariecapital.com/services/professionals/ they can walk you thru the process

I've been trading for a few family members for almost a year now. They invested a small amount of capital each so it isn't very stressful as I could easily compensate for their losses with my own money (I guaranteed them their initial deposit + 10% per year). The biggest problems I've run into are practical; My main broker is one of the main Singapore bank, the account is corporate and tied to my corporation in the Caribbean, I live in Thailand and all my family in Canada. You can imagine the mess! What I've done is simply pool their money with mine in my main trading account and calculate what is mine and what is theirs on a spreadsheet every month. When they ask me for money, I simply wire it to them and leave it to them to declare it to the local tax authorities. I do not pay any corporate tax so it doesn't affect me tax wise.