Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

darthtrader

building a track record?

Recommended Posts

well since i'm a newb but at this point given up on the idea of a career outside of trading i would love to have a discussion on building a track record.

 

Is anyone else interested in this path? While i have zero interest in ever being "king trader of the street" looking at the CTAs on autumn gold it seems i may as well at least leave that door open.

 

anyone a CTA here? Anyone doing managed accounts in general?

Share this post


Link to post
Share on other sites

Darth,

Excellent thread starter.

 

Here's some ideas that I have done, thought about doing, currently doing and/or might do in the future ;):

 

  • Something as simple as Collective2 is a good starter option for building an independent record.
  • Start a newsletter and/or chat room service.
  • Managing money for friends/family, staying below the requirements to register (requirements dictated by instrument(s) being traded).
  • Get your CTA (for futures traders) to be able to mange more accounts, receive % of profits, and/or put an add-on to the commission charges.
  • Start an incubator fund.
  • Start a hedge fund.

Those are the options as I see it, assuming you want to work for yourself or at least be able to call the shots. You could also try to go to work for a fund or bank.

 

There's money to be made in doing any of the above. One argument is that all the extra headaches and paperwork is not worth it. Another argument is that those extras are easily offset by the additional income and fees you can generate. I'm a firm believer in using OPM (other people's money) from my times as a stockbroker. If you can trade with a profit consistently, using OPM can get you to your goal much quicker. And if you decide to do something more formal, it's a matter of how far you want to take it. I think some people rule these extras out b/c they have preconceived notions as to what it takes, how much money you need, etc.

 

I look at it in terms of futures - you can drop up to 2000 contracts on the ES at one time with little to no slippage (from what I have been told by 3 different brokers). Over time you might get to the point of trading 2000 on your own, but odds are, you can do that much quicker using OPM. With OPM and say your average client trades 20 contracts, it doesn't take that many to put you in a position to make some good money from the commission add-on and/or the incentive fee.

 

It's a big decision and one that you have to either do all the way or not at all.

 

And as for your question about the CTA route, it's not difficult to get that designation at all. And once you have it, you just need to follow the guidelines set forth and then submit performance numbers to different tracking services (of course your info must be accurate and able to be audited).

 

And who knows... maybe one day a fund or bank calls you to offer a buy out... Now that could definitely make your time and effort worth it.

 

----------

Make sure to vote for me in the trading quote contest!! Hurry before time runs out!! http://www.traderslaboratory.com/forums/f97/trading-quotes-june-2007-votes-1879.html

Share this post


Link to post
Share on other sites

I'm kinda surprised no one else chimed in here. Hasn't anyone else thought about the power available with OPM? I know there's more headaches and such, but if it can take you to your monetary goal in life much, much quicker, why not? At least that's my thought process.

 

Of course the integral part here is being 100% confident in you, your system and the ability to work under pressure. That's essential when you bring OPM into the mix. But for futures traders, getting the CTA together is not a ton of work in my opinion and will require some monetary investment into your business but as the OP said, looking at some of the CTA numbers being reported to Barclays and such, I think it warrants strong consideration - either now or when you get to the point of being able to crank out some good trades consistently.

Share this post


Link to post
Share on other sites

i had never heard of Collective2 before, that site looks incredible. I can't see how its possible to build a track record cheaper than free :) That seems like it would be an interesting site even if you were not interested in OPM, just a way to keep track of yourself.

 

i have only read a bit about incubator funds, do you know much about them? from what i have read i don't really see the downside if your going to form a legal entity and don't plan on trading OPM right now. Seems it could be costly to throw away a good track record.

 

i can't see i would ever want to take on a huge amount of OPM but i can see how my friends and family have been a bit infected by the idea of extra risk from my interest in the markets. At some point it seems like it will be better all around for me to trade their money than for them to blow themselves out gambling. Good deal all around.

 

good stuff

Share this post


Link to post
Share on other sites

Just the thought of operating and reporting to others tie my freedom down. I think most of us came to trading to do one thing: no more bosses. At least that was my main motive for getting into this business.

Share this post


Link to post
Share on other sites
Guest cooter

What about your significant other at home?

Share this post


Link to post
Share on other sites

Oh yeah, that one. Uhhhh, ok, I'm trying to get it down to 1 boss in my life unfortunately, we created 2 more bosses about 5 yrs ago so I'm going the wrong way. Ok, let's just say I'm trying to keep non-family bosses out of my life :D

Share this post


Link to post
Share on other sites

Tor - I guess I view managing OPM on your conditions that you are still the boss. You are the boss of your biz. You can hire and fire clients at will. Of course if you are good at what you do, they will do just about anything to stay on board. ;)

 

Darth does bring up a valid point in managing just friends and family money as well. I know many would say just do it, get a letter of intent or something and be done, but if you want it done right, these additional ways to set up your biz should be a consideration. When it comes to money, esp friends and family, I am by the book no questions asked. I would argue that managing friends and family is worse than taking on strangers. Just be careful going this route. That's why a formal CTA, Hedge Fund, etc. is essential. Everything is laid out in black and white. This serves to cover YOUR butt.

 

I guess it's all about where you want to take your biz. Many just trade their own money and that's fine. Some want to take it a step further and leverage their work hours with OPM. And some of us just have a scratch to WANT to run a business.... :o

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • PTCT PTC Therapeutics stock watch, trending with a pull back to 45.17 support area at https://stockconsultant.com/?PTCT
    • APPS Digital Turbine stock, nice rally off the 1.47 triple+ support area, from Stocks to Watch at https://stockconsultant.com/?APPS
    • Date: 20th December 2024.   BOE Sees More Support For Rate Cuts As USD Strengthens!   The US Dollar continues to rise in value after obtaining further support from positive economic and employment data. However, the hawkish Federal Reserve continues to support the currency. On the other hand, the Great British Pound comes under significant strain. Why is the GBPUSD declining? GBPUSD - Why is the GBPUSD Declining? The GBPUSD is witnessing bullish price movement for three primary reasons. The first is the Federal Reserve’s Monetary Policy, the second is the positive US news releases from yesterday and the third is the votes from the Bank of England’s Monetary Policy Committee.     Even though the Bank of England chose to keep interest rates unchanged at 4.75%, the number of votes to cut indicates dovishness in the upcoming months. Previously, traders were expecting the BoE to remain cautious due to inflation rising to 2.6% and positive employment data. In addition to this, the Retail Sales data from earlier this morning only rose 0.2%, lower than expectations adding pressure to GBP. Investors also should note that the two currencies did not conflict and price action was driven by both an increasing USD and a declining GBP. The US Dollar rose in value against all currencies, except for the Swiss Franc, against which it saw a slight decline. The GBP fell against all currencies, except for the GBPJPY, which ended higher solely due to earlier gains. US Monetary Policy and Macroeconomics The bullish price movement seen within the US Dollar Index continues to partially be due to its hawkish monetary policy. Particularly, indications from Jerome Powell that the Fed will only cut on two occasions and the first cut will take place in May. However, in addition to this the economic data from yesterday continues to illustrate a resilient and growing economy. This also supports the Fed’s approach to monetary policy and its efforts to push inflation back to the 2% target. The US GDP rose 3.1% over the past quarter beating expectations of 2.8%. The GDP rate of 3.1% is also higher than the first two quarters of 2024 (1.4% & 3.0%). In addition to this, the US Weekly Unemployment Claims fell from 242,000 to 220,000 and existing home sales rose to 4.15 million. Home sales in the latest month rose to an 8-month high. For this reason, the US Dollar rose in value against most currencies throughout the day. Analysts believe the US Dollar will continue to perform well due to less frequent rate cuts and tariffs. The US Dollar Index trades 1.65% higher this week. Bank of England Sees Increased Support for Rate Cuts! The Bank of England kept interest rates unchanged as per market’s previous expectations. The decision is determined by a committee of nine members and at least five of them must vote for a cut for the central bank to proceed. Analysts anticipated only two members voting for a cut, but three did. This signals a dovish tone and increases the likelihood of earlier rate cuts in 2025. The three members that voted for a rate cut were Dave Ramsden, Swati Dhingra, and Alan Taylor. Advocates for lower rates believe the current policy is too restrictive and risks pushing inflation well below the 2.0% target in the medium term. Meanwhile, supporters of keeping the current monetary policy argue that it's unclear if rising business costs will increase consumer prices, reduce jobs, or slow wage growth. However, if markets continue to expect a more dovish Bank of England in 2025, the GBP could come under further pressure. In 2024, the GBP was the best performing currency after the US Dollar and outperformed the Euro, Yen and Swiss Franc. This was due to the Bank of England’s reluctance to adjust rates at a similar pace to other central banks. GBPUSD - Technical Analysis In terms of the price of the exchange, most analysts believe the GBPUSD will continue to decline so long as the Federal Reserve retains their hawkish tone. The exchange rate continues to form lower swing lows and lower highs. The price trades below most moving averages on the 2-hour timeframe and below the neutral level on oscillators. On the 5-minute timeframe, the price moves back towards the 200-bar SMA, but sell signals may materialise if the price falls back below 1.24894.     Key Takeaways: The US Dollar increases in value for a third consecutive day and increases its monthly rise to 2.32%. The US Dollar Index was the best performing currency of Thursday’s session, along with the Swiss Franc. US Gross Domestic Product rises to 3.1% beating economist’s expectations of 2.8%. US Weekly Unemployment Claims read 220,000, 22,000 less than the previous week and lower than expectations. The NASDAQ declines further and trades 5.00% lower than the previous lows. The GBPUSD ends the day 0.56% lower and falls more than 1% after the Bank of England’s rate decision. Three Members of the BoE vote to cut interest rates. The GBP was the worst performing currency of the day along with the Japanese Yen. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news. Michalis Efthymiou HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Date: 19th December 2024.   Federal Reserve Sparks NASDAQ’s Sharpest Selloff of 2024!   The NASDAQ fell more than 3.60% after the Federal Reserve cut interest rates, but gave hawkish comments. The stock market saw its largest decline witnessed in 2024 so far, as investors opted to cash in profits and not risk in the short-medium term. What did Chairman Powell reveal, and how does it impact the NASDAQ? The NASDAQ Falls To December Lows After Fed Guidance! The NASDAQ and US stock market in general saw a considerable decline after the press conference of the Federal Reserve. The USA100 ended the day 3.60% lower and saw only 1 of its 100 stocks avoid a decline. Of the most influential stocks the worst performers were Tesla (-8.28%), Broadcom (-6.91%) and Amazon (-4.60%).     When monitoring the broader stock market, similar conditions are seen confirming the investor sentiment is significantly lower and not solely related to the tech industry. The worst performing sectors are the housing and banking sectors. However, investors should also note that the decline was partially due to a build-up of profits over the past months. As a result, investors could easily sell and reduce exposure to cash in profits and lower their risk appetite. Analysts note that despite the Federal Reserve's hawkish stance, the Chairman provided a positive outlook. He highlighted optimism for the economy and the employment sector. Therefore, many analysts continue to believe that investors will buy the dip, even if it’s not imminent. A Hawkish Federal Reserve And Powell’s Guidance Even though traditional economics suggests a rate cut benefits the stock market, the market had already priced in the cut. As a result, the rate cut could no longer influence prices. Investors are now focusing on how the Federal Reserve plans to cut in 2025. This is what triggered the selloff and the decline. Investors were looking for indications of 3-4 rate cuts by the Federal Reserve in 2025 and for the first cut to be in March. However, analysts advise that the forward guidance by the Chairman, Jerome Powell, clearly indicates 2 rate adjustments. In addition to this, analysts believe the Fed will now cut next in May 2025. The average expectation now is that the Federal Reserve will cut 0.25% on two occasions in 2025. The Fed also advised that it is too early to know the effect of tariffs and “when the path is uncertain, you go slower”. This added to the hawkish tone of the central bank. However, surveys indicate that 15% of analysts believe the Federal Reserve will be forced into cutting rates at a faster pace. As a result, the US Dollar Index rose 1.25% and Bond Yields to a 7-month high. For investors, this makes other investment categories more attractive and stocks more expensive for foreign investors. However, the average decline the NASDAQ has seen before investors buy the dip is 13% ($19,320). This will also be a key level for investors if the NASDAQ continues to decline. NASDAQ - Technical Analysis Due to the bearish volatility, the price of the NASDAQ is trading below all major Moving Averages and Oscillators on the 2-Hour chart. After retracement the oscillators are no longer indicating an oversold price and continue to point to a bearish bias. Sell indications are likely to strengthen if the price declines below $21,222.60 in the short-term.       Key Takeaways: A hawkish Federal Reserve cut interest rates by 0.25% and indicates only 2 rate cuts in 2025! The stock market witnesses its worst day of 2024 due to the Fed’s hawkish forward guidance. Economists do not expect a rate cut before May 2025. Housing and bank stocks fell more than 4%. Investors are cashing in their gains and not looking to risk while the Fed is unlikely to cut again until May 2025. The US Dollar Index rises close to its highest level since November 2022. US Bond Yields also rise to their highest since May 2024. The NASDAQ’s average decline in 2024 before investors opt to purchase the dip is 13%. Always trade with strict risk management. Your capital is the single most important aspect of your trading business.   Please note that times displayed based on local time zone and are from time of writing this report.   Click HERE to access the full HFM Economic calendar.   Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!   Click HERE to READ more Market news. Michalis Efthymiou HFMarkets Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • SNAP stock at 11.38 support area at https://stockconsultant.com/?SNAP
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.