Managing other people's money to boost capital

Hello, If for example. I have system that generates 2-5% per month with small DD and i have proven statement for last 2 years. What is best way to attract money? I read in internet, that you need by licensed to manage other people money, it's too complicated and expensive to make. What way would you choose?

Some will ask: If you can generate that %, why don't you trade for yourself? - Because trading account is too small. (for. ex 3000).

Well question is: What is most optimal way to get bigger capital in shorter time? (If you can't add more money yourself to your account and wait to your capital grow with "only" 2-5% per month (lot increases only when you reach 100% of your initial capital)) will take a lot time.


ps. Please let's don't discuss, is it possible to get 2-5% or not or any other off topic, but just answer on questions above. Thanks.


Best regards,
Eric

if your system can generate 2-5% per month, it implies you are generating 12-60% per annum (w/o compound
). If you have great confidence in your system. Go take up some loans below these rates; 12-60% per annum (should be easy).

of course most of us will not do that because there is no sure win in trading

Hi dreamt1me, since i've been stuck in the same conundrum (being able to make consistent returns, with low DD but having low capital) I guess I can share what I read around...

first and foremost as far as I understood it you can manage other people money w/o needing the qualifications is via mirror trading, PAMM accounts, IB account -

IB Account: You become Introducing Broker of a broker, the customer that signs up via your referral and signs a power of attorney form gives you permission to trade on your behalf, their capital is safe and you cant touch it - and your commissions are cut automatically by broker.

PAMM accounts: Alpari had a great thing going with it but now there UK branch is dead - essentially think IB accounts but without the hassle of finding clients etc... Alpari Clients could see rankings of money managers, select whoever they preferred - money managers started a fund with their own money (usually 2 to 3k) and they could not withdraw it without liquidating the fund entirely so clients had the additional benefit of knowing that manager is trading with their own money and the clients.

Mirror: you make trades, clients make mirror trades of that trades... several companies exist that tried to take advantage of this social form of trading... etoro, zulutrade, myfxbook, tradency etc

I'd recommend opening a myfxbook account to get your trading history recorded so that you can present it to other people as proof of your trading - right now, when you say you have 2 years record of consistent profits, no smart investor is gonna believe it until they see your record on myfxbook or some other reputable service... and they'll also look at whether you traded via a repuatable, well known broker cuz some brokers allow for record manipulation (recommend FXCM, Oanda) and all of them prefer a record of several months if not more than a year... so there's some more waiting to do... anyway, start building that proof and then maybe you should look into tradency or becoming an IB after having proof of profitability with you... in my research they were the ones who showed the most promise of getting me noticed to investors.

If you have proven results for the last 2 years with targets 2% to 5% month with small DD, just show the results and the investors will appear.

Thanks for responses. Montys, Don't i need license if i want to make PAMM, Mirror or IB account?

As far as I know, you just need approvals from the brokers or companies... for example tradency has several requirements for a strategy they're gonna approve, they're gonna analyze 30 trades, then make you sign form that essentially states your strategy is automated (but one can say yes it's automated and still do it manually), and even if your trading strategy meets their requirements they're gonna watch it in case you change it afterwards.... similarly all the brokers will make you fill forms etc in case you want to be their IB.... the licenses (essentially tests that you have to pass) are more of a requirement for those who are institutional traders... sorry if im not being clear but let me know if you have any other questions

Open a trade copier system that has a live performance record verified by myfxbook, that is best way for getting funding of 100-100000 clients.

This is not allowed in for example Belgium.
If i want to start a PAMM account or become an IB to trade on behalf of clients, want to provide signals, etc, with a regulated broker like for example FXCM or Dukascopy, i need to be licensed by FSMA, the regulator in Belgium.
This is the case for whole europe, uk and usa as far as i know, maybe more, so watch out with this when you are getting a lot of big investments!

Brokers in Australia would let me do it, they do not care if i have a license or not, but for FSMA it still would be illegal.

See my post above, for me in Belgium it would be illegal without a license.
Best thing to do is to check with regulated brokers (non Australian, they don't ask for a license) and with the regulator of your country.

Edit: There are brokers which could setup constructions for you but they will ask a serious verified track record and at least some clients with nice deposits.

Ask friends and family.
I think they will be happy to take the risk to put their money in your hands if you can give them more % then they get from the bank. Give them 50% of what you make per year (of their own capital) and make some kind of alert for them if their capital goes -10% so they can decide to withdraw their capital.

Rather never ask family and friends to invest their money, if you fail you will destroy relationship Better use myfxbook.com and tradency.com, it's legal for you.

Hello Eric, Google Pamm accounts, then check with your UK broker. It is my understanding that with a Pamm account you trade OPM (other people's money) without a license or the expense of setting up your own fund. When you get your info direct from your broker you get facts, not forum opinion. Regards - Lou

"The only thing in life that's free is advice and kittens. I've had much better luck with the cats."

In the UK it is not illegal to trade OPM using a PAMM account. Check with your broker.....

It is illegal to advertise and solicit funds if you are not registered with the FCA. That may not be such a massive problem however I suspect that if you try asking the FCA no-one will understand what you are trying to ask, and then they will just tell you to get licenced.

Grey areas....
- since you never 'have' the OPM you are not relieving people of their cash.
- I don't know if taking a commission for winning also requires you to be registered

You need a bit more research by the sound of it, and of course we all will be interested to hear/read what you discover.

BTW the typical commission rates for trading OPM are 20% ~ 25% of profits based on a high water-mark principle.
....I have seen bigger numbers vaunted by some hopefuls!