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mickro

What to Do with Success on Paper

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Been trading a paper account for a while with pretty good success. What are some next step's to taking this into really making some money? The real account is really too small to do this organically.

 

I'm thinking joining a prop shop or showing paper trading results and trying to get a job based off of it, to seeking a few private investors and running a small fund. Anybody have some ideas or related experiences?

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Well first of all I'd say that this game is a marathon not a sprint. So patiently growing your small but live account is not something you should dismiss so easily. I'd also like to point out that whilst trading a small account may not make you rich overnight, it gives some legitimacy to your results. Paper/sim trading is just not the same. You can cheat, fills are generally better, you are under only a fraction of the potential stress of trading live. If you have a good system, trade it live then show people your results.

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Been trading a paper account for a while with pretty good success. What are some next step's to taking this into really making some money? The real account is really too small to do this organically.

 

I'm thinking joining a prop shop or showing paper trading results and trying to get a job based off of it, to seeking a few private investors and running a small fund. Anybody have some ideas or related experiences?

 

  • No job will hire you based upon paper trading results unless there's more info to the story that you didn't want to mention for whatever reason. For example, your best friend works for a fund and can get you in the door with your paper trading results.
     
  • Running a small fund is a possibility but you need a lot more credentials than paper trading results along with the resources to manage a fund.
     
  • Private investors is a possibility but they'll need to see some real trading results to go along with the paper trading results. Those that don't ask for real trading results...really don't understand what they're getting involved with via giving you money and probably aren't going to react well when things go wrong.
     
  • Prop Shop is a possible solution and such may require you to relocate unless there are already prop shops in your city.
     
  • Trade a small account to accumulate real trading results. This will show others that you understand the true risks of trading your own money which will also give you more realistic expectations of trading someone's else money.
     
  • Best solution is to just raise your own money via working multiple jobs. Yeah, you'll have to wait a few years but its well worth it. It's what most do in your situation and you can continue perfecting your trading plan in the process until you have the capital to trade your own account...markets will be here tomorrow...no rush.

 

I worked three jobs, down scaled my lifestyle for several years to raise my trading capital and I saved most of it. I know many others that did the same. You should be able to do the same especially if you're serious about trading unless there's good reasons why you can't work other jobs.

 

In addition, private investors will be "more impressed" with your work ethic when they learn about how you raised your initial trading capital and you'll have some real trading results under your belt via your own capital.

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  • No job will hire you based upon paper trading results unless there's more info to the story that you didn't want to mention for whatever reason. For example, your best friend works for a fund and can get you in the door with your paper trading results.
     
  • Running a small fund is a possibility but you need a lot more credentials than paper trading results along with the resources to manage a fund.
     
  • Private investors is a possibility but they'll need to see some real trading results to go along with the paper trading results. Those that don't ask for real trading results...really don't understand what they're getting involved with via giving you money and probably aren't going to react well when things go wrong.
     
  • Prop Shop is a possible solution and such may require you to relocate unless there are already prop shops in your city.
     
  • Trade a small account to accumulate real trading results. This will show others that you understand the true risks of trading your own money which will also give you more realistic expectations of trading someone's else money.
     
  • Best solution is to just raise your own money via working multiple jobs. Yeah, you'll have to wait a few years but its well worth it. It's what most do in your situation and you can continue perfecting your trading plan in the process until you have the capital to trade your own account...markets will be here tomorrow...no rush.

 

I worked three jobs, down scaled my lifestyle for several years to raise my trading capital and I saved most of it. I know many others that did the same. You should be able to do the same especially if you're serious about trading unless there's good reasons why you can't work other jobs.

 

In addition, private investors will be "more impressed" with your work ethic when they learn about how you raised your initial trading capital and you'll have some real trading results under your belt via your own capital.

 

All sounds like good advice to me!

 

Depending upon the amount of capital that you think you may be able to raise from family and friends, another approach, as opposed to dealing with the significant hassles and expense of registering as a CTA and managing a fund, is to form a company in which your investors buy shares. You'd probably call this something like a 'commodity pool'.

 

Further to this, if you can raise sufficient capital then you can commit part of it to an established and successful fund with a strong track record, or even in an instrument such as bonds - in a wost case scenario, the profits from these would hopefully offset any losses that may result from your own trading. The fact that your commodity pool is able to offer up the real-world track record of an established fund may also help in raising capital.

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