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Why not trade your own money?

Sir. Williams (wilfredoaa)
Sep 16 2010 at 07:18
82 postów
I see some benefits on trading others peoples money.
But at that same time there are somethings that don't appeal to me.

For example... Loosing somebody else money.
or
Making money for somebody else.

I think most traders think that they need big accounts to make more money and the reality is that instead of making more money traders end up loosing more money.

I mean if you only have $100 and you consistantly make 20% to 40% a month. This money at the end of 10 years or 20 years will be a lot of cash. Yeah you might not make a good living out of it but if you save and reinvest you could retire with a nice sum of cash. So if your system works for you why not use it with your own money.

I see some return of investments from fellow traders here that you really don't need a lot of capital to make some descent cash. Unless you are greedy or just loose most of the time.

Is there any other trader in here that feels that trading your own money is the best way to go?

or Do you feel that you have to trade others peoples money to get ahead.

Maybe is a mixed of both... I would love to hear from you.

Grace is the greatest thing ever!
Steve B (stevetrade)
Sep 16 2010 at 08:21
1408 postów
Having traded other people's money ( and a reasonable sum as well ), I can say that it does increase the stress of trading. I certainly would not recommend it unless you have ice water in your veins!

That said if you can master the psychological aspect or it or just couldn't care less if you lose other people's money then it's a good way to get more funds for your own trading account.

Making 20-40% of $100 isn't going to pay the bills and for a lot of people trading is a full time profession and so has to pay the bills.


11:15, restate my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph these numbers, patterns emerge. Therefore: There are patterns everywhere in nature.
Elkart
Elkart
Sep 16 2010 at 08:47
941 postów
Steve all those $100's add up.

I been playing with the O money manager and just on 30k stuffing around I already made my car payment in fees.

And I been wondering for a very long time, how many $100 accounts are lying around at O unused because the trading failed? 1000 ? That be $100 000 one can attach to an MM and trade as a single account. If an API is handling it well worth it!!

Sir Williams,

I feel it's better to trade your own money if you're successful. Every new client is a new boss. And we're in this game to be free from normal work constraints? I am anyway. So my view is to keep it light, but there will always be accounts that you have to manage, like for friends and family...

The idea is not to make as much as possible, but I have a suspicion it's no fun to be rich alone. Got to take some people with so you have friends on the same level as you...otherwise you party alone.

Steve B (stevetrade)
Sep 16 2010 at 09:12
1408 postów
I think Sir Williams was referring to trading your own $100. Not everybody elses $100.

Totally true about the new boss. I traded a friends capital once and he actually sat in work and loaded up some charts and was emailing me all day about the trades that had come up and comparing them to how I was doing. How crazy is that?

Also true about not wanting to party alone, but you also need to consider the fact that wealth needs to be earned or it will never be appreciated. People who get rich quick with little effort on their part generally end up blowing it.

11:15, restate my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph these numbers, patterns emerge. Therefore: There are patterns everywhere in nature.
Elkart
Elkart
Sep 16 2010 at 09:39
941 postów
Well, 20% a month compounded is 1000% a year.

So....

100
1000
10 000
100 000
1 000 000

5 years.

With only 100 I'd take clients. Bigger you get that initial base the better, but here after year 5 it's going to be a pain. Starting cap of 10k I wouldn't bother with clients unless it's a really big account.

Steve B (stevetrade)
Sep 16 2010 at 09:52
1408 postów
Yep, I can see the benefit of compounding and of taking on clients and that having enough clients with $100 would actually generate a good enough income.

Sir Williams was talking about trading your own $100 and in the first month $20 sure isn't going to pay my bills. It's a nice thought to think 'I only need to risk $100 and I can make a decent return'. The point I'm making is that to get that 20% return you probably have to make trading your full time profession.




11:15, restate my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph these numbers, patterns emerge. Therefore: There are patterns everywhere in nature.
Elkart
Elkart
Sep 16 2010 at 10:06
941 postów
$20 not going to pay your bills? Scale down big spender!! Move to India.

Of course your right. If he can do 20% to 40% consistently have to risk a bit more to get going.

Soeren (GridsForPips)
Sep 16 2010 at 11:58
205 postów
Steve, I know it's only been running less than a month and it's too soon to see the long-term profitability, but a decent Expert Advisor (My EA, haha), seems to be able to give you those 20% return a month (so far mine's at 30%), all while you sleep. Under these circumstances I have no problem waiting for that 'full-time' income.

On the other hand, trading other peoples money, would suit me fine, I think it's a question of making it very, very clear to investors, that the possibility they could loose their whole investment is present. It may get you less customers, but they won't (at least I think so) come after you afterwards. In my case, with the 6% a month target, I'd have to say that I won't expect net profits until after the 1st year, because I want to have room for a constant DD of 50%, due to the nature of my strategy. Therefore I need long-term investors that are aware of this. And that's also why I'm reluctant to take on any investors until i have at least that 12 months traderecord.
If net profits is reached earlier, well, that's just a bonus, both for investors and myself 😄.

I have set up a PAMM at Instaforex, with minimum 1$ deposit, and if any investors sign up I'll tell them the above situation before accepting their investment. Because my EA is not older, I've also started with a 10% fee of profits for managing, where most others charge 30-50%.
If my EA is still profitable after 6 months, maybe I'll sign up for an Alpari PAMM, under the same circumstances, knowing that I might never get any customers.
Once I have the funds and the programming skills to move to Dukascopy, that's where my future PAMM will be...

My point is, fulltime trading might not be necessary to get those 20%, and then a 100$ seems to be the perfect investment if you can wait for the steady income.

Cheers, and good luck with your own Expert Advisors.

Soeren

Steve B (stevetrade)
Sep 16 2010 at 12:04
1408 postów
Thanks Soeren, are you regulated? You need to be to be a money manager with Dukascopy I believe as well as some of the other regulated brokers.

Your strategy seems to be working well but I personally wouldn't be happy with the drawdown. I get twitchy when I see equity drawdown. My own EA, which similar to yours has only been running it's current configuration for less than a month is also around the 20% return mark with an equity risk of 1% per trade.

I plan to put it on a live account this week and see how it performs before, like you, offering it out to other investors.

11:15, restate my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph these numbers, patterns emerge. Therefore: There are patterns everywhere in nature.
Soeren (GridsForPips)
Sep 16 2010 at 12:26
205 postów
No, I'm not regulated (yet 😉). I just checked Dukas' site, and in the money manager application form you're asked if you're regulated or not. Maybe they'll help get a license if not?

I've actually been asked to sell my EA, but I had to decline due to two reasons: the short testing time and especially to protect my work.
Besides, if I should sell it, I'd have to charge 1000$ a piece to make up for all those hours, and I have a feeling very few people would pay that kind of money for an unverified EA haha.

Behemoth sure looks great so far, and I hope it works just as great on a live account..

Cheers

Soeren

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