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Profit Sharing with Client

  • #1
  • First Post: Jun 3, 2014 7:17am Jun 3, 2014 7:17am
Hi if anyone can help me, I am fairly new to trading, I have a client who wishes me to trade on there behalf, what is the industry standard % of profits I should profit share with them on a monthly basis.? all ideas and knowledge welcome.
Thanks for your help.
Leon
  • #2
  • Jun 3, 2014 7:19am Jun 3, 2014 7:19am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting Hutchie360
Hi if anyone can help me, I am fairly new to trading, I have a client who wishes me to trade on there behalf, what is the industry standard % of profits I should profit share with them on a monthly basis.? all ideas and knowledge welcome. Thanks for your help. Leon
Are you kidding ?

You will need few years of practise before even thinking trading live your own funds.
MT4/MT5 EAs/Indicators/Alerts coder
  • #3
  • Jun 3, 2014 7:25am Jun 3, 2014 7:25am
FerruFX are you able to answer the question?
  • #4
  • Jun 3, 2014 7:31am Jun 3, 2014 7:31am
127%-122% is yours at the end.
But only from a good client
  • #5
  • Jun 3, 2014 7:32am Jun 3, 2014 7:32am
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting Hutchie360
FerruFX are you able to answer the question?
35% of the profits (above the watermark) is a common practice ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #6
  • Jun 3, 2014 7:41am Jun 3, 2014 7:41am
Quoting Hutchie360
Hi if anyone can help me, I am fairly new to trading, I have a client who wishes me to trade on there behalf, what is the industry standard % of profits I should profit share with them on a monthly basis.? all ideas and knowledge welcome. Thanks for your help. Leon
Industry standard is 2 and 20. Meaning you take 2% of the funds under your management, and you take 20% of the profits. That has been the standard for a long time for hedge funds

Given that you're not a hedge fund, you may have to accept less.

Make sure if you do go ahead that you make sure everything is legal. Managing other people's money is not always straightforward from a legal or regulatory standpoint.
  • #7
  • Jun 3, 2014 10:28am Jun 3, 2014 10:28am
Thanks for the feedback guys much helpful appreciate it. :-)
  • #8
  • Jun 3, 2014 11:21am Jun 3, 2014 11:21am
ok just another quick question on base capital:

What would be charged against these figures for example?

25k
50k
100K
250k
500k
1m
5m
10m
  • #9
  • Jun 3, 2014 11:53am Jun 3, 2014 11:53am
Quoting Hutchie360
ok just another quick question on base capital: What would be charged against these figures for example? 25k 50k 100K 250k 500k 1m 5m 10m
I've already answered this. A hedge fund typically has employees, infrastructure, a building, computers etc. so they have regular costs and trading returns are uncertain. Therefore they charge a fixed % fee of the total funds (the 2% I mentioned earlier). If you are an individual, you probably shouldn't need to charge as much as that. Then there is the profit split, and standard is 20%. If your returns are really good, you could charge more than this.

If you're new to trading, nobody sensible will give you money to trade, unless it's family or friends. You'll need to show a track record.
  • #10
  • Jun 3, 2014 2:54pm Jun 3, 2014 2:54pm
Quoting Hutchie360
Hi if anyone can help me, I am fairly new to trading, I have a client who wishes me to trade on there behalf, what is the industry standard % of profits I should profit share with them on a monthly basis.? all ideas and knowledge welcome. Thanks for your help. Leon
The 2% and 20% standard mentioned above is used by regulated hedge funds, setting up a business like that is a major undertaking. If you are simply trading on a clients behalf the general rule is 30 - 35% above high water mark.

Highly recommend reading this book first if you are considering this, it is written by a retail trader who built his own fund from the ground up and contains a lot of stuff you really need to know. A much better source of information than this forum.

http://www.amazon.com/Trade-Currency...+currency+fund
si hoc legere scis nimium eruditionis habes
  • #11
  • Jun 4, 2014 12:45am Jun 4, 2014 12:45am
Great thanks for the insight guys, I will order that book today.
  • #12
  • Edited 12:49am Mar 14, 2020 12:37am | Edited 12:49am
Quoting FerruFx
{quote} 35% of the profits (above the watermark) is a common practice ...
Great FerruFx

But i still not clear with these :
*) What is the meaning of "above the watermark" ?

*) I am also want to know if it is based on Capital, like the question here : https://www.forexfactory.com/showthr...15#post7509715

*) And also, is it ok or not, to change the portion if the investor's capital after the ROI is reached ?
Lets say , profit is calculated monthly ... ROI in 20 months :

Capital <25K USD :
Before reach of ROI, lets say 35% of profit for trader, 65% for investor (first month to 20th month).
After reach of ROI, it becomes 40% of profit, 60% for investor (after 20 months), because in this case ... the investor has got his money back, his risk indeed smaller now ...

Capital 25K - 100K :
Before reach of ROI, lets say 32% of profit (first month to 20th month),
After reach of ROI, it becomes 38% of profit (after 20 months).

Capital >100K : the portion for trader is smaller ... etc ...

Thanks.
  • #13
  • Mar 14, 2020 12:48am Mar 14, 2020 12:48am
Quoting Hutchie360
Hi if anyone can help me, I am fairly new to trading, I have a client who wishes me to trade on there behalf, what is the industry standard % of profits I should profit share with them on a monthly basis.? all ideas and knowledge welcome. Thanks for your help. Leon
Depends on what you think is right, I advice to use 30% depending on how you will trade, if you can doubleup the account in two weeks you can even take 32% as your option.
The success of a successful man is behind the success of a successful frien
  • #14
  • Mar 14, 2020 1:00am Mar 14, 2020 1:00am
Quoting Slinge
{quote} Depends on what you think is right, I advice to use 30% depending on how you will trade, if you can doubleup the account in two weeks you can even take 32% as your option.
I am just thinking of this (almost impossible) thing .... if we really can do that (get profit 100% in 2 weeks) , we do not need any investor any more ...
Just using capital of only 1K ... how much can we get in 5 years ??? unbelievable right .... ?

Deposit (0 week) = 1K
after 2 weeks = 2K
after 4 weeks (1 month) > 4K
after 6 weeks > 8K
after 8 weeks (2months) > 16K
after 10 weeks > 32K
after 12 weeks (3 months) > 64K
etc ... etc ...
  • #15
  • Mar 14, 2020 1:33am Mar 14, 2020 1:33am
Quoting newhope
{quote} I am just thinking of this (almost impossible) thing .... if we really can do that (get profit 100% in 2 weeks) , we do not need any investor any more ... Just using capital of only 1K ... how much can we get in 5 years ??? unbelievable right .... ? Deposit (0 week) = 1K after 2 weeks = 2K after 4 weeks (1 month) > 4K after 6 weeks > 8K after 8 weeks (2months) > 16K after 10 weeks > 32K after 12 weeks (3 months) > 64K etc ... etc ...
You can't compare others to yourself, there are things I can do that you can, if you insist then give me a $100 account let's use for the experiment.
The success of a successful man is behind the success of a successful frien
  • #16
  • Last Post: Edited 6:07am Mar 14, 2020 1:59am | Edited 6:07am
Quoting Slinge
{quote} You can't compare others to yourself, there are things I can do that you can, if you insist then give me a $100 account let's use for the experiment.
You got good enough result on your explorer ... congratulation ...
It is not to under estimate you, but there is something Interesting here ... it smells like a scam.
You are a new member at FF, using Demo Account, and your account age is just 37 days (with 22.4% return), hmmm ....
i must think 10x to give you my $100 for you Expertiment ... , it's better for buying some candies for children
Thank you for this ... but it is not now, may be next month, next year, or next 10 years ?? HA HA HA
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