Sounds like a good idea but have a look at the latest FX developments which are gaining rapidly in popularity..
Trade signals check out these links: http://www.zulutrade.com/performance
https://www.fxcopy.com/
http://www.mql5.com/en/signals and there are many others.
So basically you can trade the signals of these traders and pay a slight increase in spread.Obviously trading in the
retail FX space is not ideal. However why not set up something similar for futures if the relevant platforms support throughput of signals/copying signals.Then just pay a premium to the particular trader for signals used.Quite an elegant approach I would have thought.
Most of the equity curves are rubbish unfortunately. You'd never subscribe. Are there any good traders on these sites?
75% or so now would....
CanOz
Hi CanOz,
Not sure what you mean by this but I just wanted to make myself very clear.
I was initially hesitant in selecting any of the options in your poll as none of the answers really fit for me.
In reality, my answer is more a combination of the 2nd, 3rd and 4th answers however I'm always open to looking into new ideas so I selected response number 2 "Yes, i would be interested in seeing a business plan on this."
This however does not mean I would be signing up for it. It ONLY means that I'd be interested in looking into it out of sheer curiosity.
The chances of me actually participating in something like this from it's onset without any history, are pretty close to ZERO.
Zulutrade seems to be the most popular I think there are a few reasonable traders there but agree re equity curves. Most equity curves go to pieces after 6-12 months also stops/drawdowns are extreme in a lot of cases.
However I brought up the idea of using the concept to achieve what CanOz is proposing which means that regulatory and compliance issues are minimal and transparency and risk is controlled to an extent.
That's ok, its only a poll. There is no obligation.
CanOz
Waza I'd imagine the idea is to create a business rather than just a system. Something that grows and helps traders rather than churn and burn.
Is risk the answer to what they look for? How it's managed etc, especially as they give you more and more of their money?
That's not really what I meant.
I just wanted to illustrate to you, that it's a mistake to assume that the voters answering "Yes, i would be interested in seeing a business plan on this" mean that they would actually be willing to "fund a trader with a proven record" so you shouldn't count them as you did "75% or so now would.... CanOz".
The answer "Yes, i would be interested in seeing a business plan on this" means exactly that and only that.
Therefore the way you are counting your result thus far, is inaccurate.
Get my drift?
The big problem in this setup with having investors is the profit split. Are your investors going to be happy giving 50% to the trader, 20% to the firm and taking the remaining 30% while also taking risk? Clearly the investors will have to be the firm. CanOz?
Yeah its really of little concern about percentage return to some degree. I can turn over my allotted size 20 - 40 times a day. You can imagine the actually $ value of that each day! I'd probably be horrified to actual know the return on funds traded come to think of it.
But as with all trading it comes down to comparing, in a daytraders case, avg winning days to avg losing days. And then there is a huge difference between traders. Some have 80% wining days and the odd shocker some are 50/50 but with every 10 or so days huge winners. Its really about how you can build decent positions when its going your way and then mostly not lose your head when its not going your way (all of last month for me!).
You have a daily stop thats a rough end of the day "your not seeing it right come back tomorrow" kinda thing. (sometimes if you have been a good boy you still get to play if you blow it). The idea is you will do no more damage to your account than what you can fix tomorrow. Then you have a risk manager monitoring everything in real time to make sure no one has gone off tilt and blowing up agreed daily/weekly/total loses.
So if you can put on the size they give you, cover cost and grind your account higher you and they (the prop firm) will make money and everyone is happy. (though its no easy way to riches..... surprise!)
The big problem in this setup with having investors is the profit split. Are your investors going to be happy giving 50% to the trader, 20% to the firm and taking the remaining 30% while also taking risk? Clearly the investors will have to be the firm. CanOz?
1. What does "proven record" mean?
2. If they were that good, well why would they need my money?
1.) a positive expectancy
2.) to increase position size
CanOz
How often have we seen a strategy tested, backtested, and proven beyond doubt for position sizes of $xxx, but when we tried to up-scale five-, ten-, or 100-fold, it has influenced the Market to the point of becoming counter-productive.
Hence my continuing to say "no way!"
Funny that all the good traders I know are trading prop or hedge funds all the strugglers are trading retail.If they were that good, well why would they need my money?
A quick post on the why trade for a prop. To counter the "if ya a good trader why would you need to question".
First and most obvious SIZE. With props willing to let you go nuts with size you would need a huge personal account to match that. HUGE. Almost impossible to get there if you don't start there.
Second COST. Try moving size with retail brokerage. Forget it. You will be cut to bits. This alone could save an active trader $50,000 to $100,000 a year!
Third. IT support straight away.
Fourth. Having a risk manager helping and looking after you. Their interest is aligned with yours. Lot easier falling into a pit when your sitting in a room by yourself and no one looking out for you.
Fifth In spite of the "best job in the world" spiel it gets friggin boring sitting in your own house. Especially when you are youngish.
Sixth Better execution into the market.
Seven Experience in development of real traders not all the BS out on the web/books/ etc.
Eight With size and cheap brokerage and a experienced risk manager you can take a small expectancy and make a bucket load.
Ninth And this is the winner for me. You can take profits and still trade the same size. Think about it. If you are trading your own capital every time you take money out its like a loss. You are effecting your future earnings because you are reducing your size. Every time you pay your tax bill you reduce your size. There is no way around it when you trade your own capital.
Probably some props could add to this. But the "if you can trade for yourself why" question is because most have a dream that has nothin' to do with the reality of living off trading.
How often have we seen a strategy tested, backtested, and proven beyond doubt for position sizes of $xxx, but when we tried to up-scale five-, ten-, or 100-fold, it has influenced the Market to the point of becoming counter-productive.
Hence my continuing to say "no way!"
Why are you so silly risking your own money! I mean really??
Thats a great point if your trading for a living.
Some of us dont and dont want to trade for a living.
We have different lifestyles and commitments.
Different goals and capital bases.
All I and a few others here I know of want is to generate a low risk
passive income and at times it is very generous.--Its all I/we need.
My peanuts trade on the FTSE last night took 23 mins and secured 12 ticks x 3 contracts.
Around $500 from the time I got home to tea.I only trade the first hr or 2
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