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What Are Investors Here Looking For?

  • #1
  • First Post: Sep 28, 2015 4:10pm Sep 28, 2015 4:10pm
I thought I'd start this thread to try and get an idea of what sort of risk appetite and gains targets people who are looking for investments here seek.

I am sure most of you will have been around the block so excuse me for pointing out the obvious but just for the benefit of people perhaps newer, the gains you can potentially get correlate with the risk exposure you take.

For example, if someone sends me a message and says;

"Hey, I want to make 200% a month, can you do it?"

I'd reply "Are you willing to lose 100%?"

(This is an exaggerated example, even if you were willing to blow the account, we could not do 200% a month with any sort of consistency or longevity)


Anyone who does not discuss this risk with you is probably not the best person to be looking after your money.

I consider money managers to be first and foremost risk managers - and if they didn't talk about risk .... guess what they might not be very good at?

So - please when answering be sure you give the risk you are willing to take as well as any potential gains you are looking for.

A honest money manager will not be able to tell you if they can do one without knowing the other.
  • #2
  • Sep 28, 2015 4:18pm Sep 28, 2015 4:18pm
Please note, when I refer to drawdown I mean relative equity drawdown.

Some people will float a loss 50% down and close it at a profit and act like there was no DD haha.

When referring to risk and DD I mean from the very high in equity to the very low in equity (AKA deepest valley)
  • #3
  • Sep 28, 2015 4:19pm Sep 28, 2015 4:19pm
Quoting 5ssfx
Please note, when I refer to drawdown I mean relative equity drawdown. Some people will float a loss 50% down and close it at a profit and act like there was no DD haha. When referring to risk and DD I mean from the very high in equity to the very low in equity (AKA deepest valley)
Not just closed trades, to be perfectly clear.

Real risk taken.
  • #4
  • Sep 28, 2015 4:30pm Sep 28, 2015 4:30pm
Quoting srt
After investing in CTAs/Managed Futures programs since 2008, I won't look @ anything with a drawdown greater than 30%. No reason to even look @ ROI if drawdown is too large. Just my opinion but some like to swing for the fences :-)
I agree with your perspective as well.

Although there is demand for a lot more aggression than that haha.

So, on the gains side of that, what's good?

I'd presume you are in the 10-20% range on average monthly upside?
  • #5
  • Sep 28, 2015 4:37pm Sep 28, 2015 4:37pm
Quoting srt
. No reason to even look @ ROI if drawdown is too large.
Most serious investors say this, by the way (for the benefit or others, I am sure srt knows).

To put that another way, if I go to someone with a couple 100K to invest and I say 20-30% a month gains they will not even look.

They will know the correlated risk with that will be unsuitable for them.
  • #6
  • Sep 28, 2015 4:39pm Sep 28, 2015 4:39pm
Quoting srt
{quote} I've never looked for anything with that high a monthly return since I've been mostly in 6 figure futures programs so they don't have the same leverage as forex & don't get those returns because they're usually more conservative to reduce drawdown. Also, managers are paid a management fee based upon AUM so never use nearly all the money available because they don't want the wild swings in their performance and get a decent payment just from the 2% fee.
Ah, I was accounting for a 30% DD tolerance.

On that, I'd be looking for at least 10%.

Just based on the recovery factor.

If you DD 30% and get under 10% on average a month your looking at a long time to get to HWM and you'd be better on a lower yield/lower DD.
  • #7
  • Sep 28, 2015 4:41pm Sep 28, 2015 4:41pm
Quoting srt
{quote} I've never looked for anything with that high a monthly return since I've been mostly in 6 figure futures programs so they don't have the same leverage as forex & don't get those returns because they're usually more conservative to reduce drawdown. Also, managers are paid a management fee based upon AUM so never use nearly all the money available because they don't want the wild swings in their performance and get a decent payment just from the 2% fee.
How about optimum DD level to gains?

You have a ratio?

30% is the extreme top I see, not really something you are willing to float close to too often.
  • #8
  • Sep 28, 2015 4:44pm Sep 28, 2015 4:44pm
Are we closer to your appetite here str?
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  • #9
  • Sep 28, 2015 4:48pm Sep 28, 2015 4:48pm
Quoting srt
{quote} In general, it's usually OK if yearly return=yearly risk. (20% max. yearly drawdown OK if yearly return is 20% or more on average) You talk in months but I look @ yearly as it's an INVESTMENT & not a TRADE.
Good

Excuse me, I also do prefer to look at things on a quarter basis at least but oftentimes in forums and such I meet people who have less sophisticated view points.

So, the one I posted above;

5.2% deepest valley
Averaging about 30-40% a year.
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  • #10
  • Sep 28, 2015 4:50pm Sep 28, 2015 4:50pm
All trades always open with stops. Yes.

Losing positions are never added to.

No martingale or gridding activity.

This typically takes risk exposure one or two days a month and that exposure is typically 2-3%.

All trades close in under a day.
  • #11
  • Sep 28, 2015 4:52pm Sep 28, 2015 4:52pm
Risk metrics.
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  • #12
  • Sep 28, 2015 4:54pm Sep 28, 2015 4:54pm
Spread of returns (you will see it is mostly flat, as explained above)
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  • #13
  • Sep 28, 2015 4:54pm Sep 28, 2015 4:54pm
Weighted spread.
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  • #14
  • Sep 28, 2015 5:00pm Sep 28, 2015 5:00pm
Quoting srt
{quote} The biggest problem I have now is the "broker" issue. I've only invested in one offshore forex broker with a trader that was using a broker (Inovatrade) in panama. I still have $100K there that I'll probably never see again. The only way I'll go offshore again with an account is if I can get high leverage so can deposit the smallest amount needed to trade the program.

With 100K I can get you processed as a sophisticated investor and you can use a NZ broker that is regulated with segregated accounts.

They tend to cater more to institutional clientele than retail and are reputable.

They were cleared for the management of Superannuation funds (Aussie gov pensions)

I have another option for HNW also but it's a 10M net worth barrier.
  • #15
  • Sep 28, 2015 5:01pm Sep 28, 2015 5:01pm
Via another offshore broker we can do 1:300 leverage.
  • #16
  • Sep 28, 2015 5:06pm Sep 28, 2015 5:06pm
I have this one too, this is a more aggressive version of the first one (trading *3 risk) that trades more pairs.

The DD here is misleading, this will increase.

25% we have it over 2 years.

The gains are representative though.
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  • #17
  • Sep 28, 2015 5:07pm Sep 28, 2015 5:07pm
Quoting srt
{quote} Sorry, but I'll never go offshore with that amount again. I had futures programs in MF global & PFG and both were fully regulated by CFTC & NFA and that did no good. I have NO trust in the regulators. Like I said, it'll only happen if I can get a 500:1 broker so can deposit 10K for every 100K in a 50:1 broker. ***BTW, I'm not a HNW individual. I just don't like to leave my savings in the bank making 1%.
Perfectly understandable.

The brokers I know that would give that leverage on a PAMM account I would not trust to put clients funds with.

1:300 is where I am capped on leverage.
  • #18
  • Sep 28, 2015 5:08pm Sep 28, 2015 5:08pm
Quoting srt
{quote} That would be better. What's the minimum deposit amount?
Just $1,000.
  • #19
  • Sep 28, 2015 5:10pm Sep 28, 2015 5:10pm
Quoting srt
{quote} I understand the DD will be larger if the leverage is increased but I can access the proper R:R.
We can do the same DD/risk.

Just because leverage is there does not mean we have to use it.

We offer our strategy on low risk, medium risk and high risk and we just mark up the risk per position.

I have shown you the low and medium.
  • #20
  • Sep 28, 2015 5:11pm Sep 28, 2015 5:11pm
Quoting srt
{quote} What's the broker?
http://www.forexpeacearmy.com/public...w.tallinex.com
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