That being the case, Xtrader59 how is your proposal better then that same trader taking the money in escrow and instead trading it directly for himself, thereby keeping 100% of the profits and not just a portion of it? The trader's risk is the same in both cases since he must make you whole in case of loss. ---------------------------------------------------------------------------------- I think of it as an insurance policy built on the trader's competence. You don't pay your car's whole price to the insurance company. Say the basic trader's reward is 30%. Then 80% reward for the total protection means earning 0,5% for each 1% of capital protection. A very expensive insurance policy. If the trader is very proficient with his technique and will not lose anything, maybe this could be a way to increase drastically his income. But as pointed out he would probably prefer a bank loan (he will pay interest for the right to earn the whole 100% instead of 80% profit). As a free contract I thought it should be attractive to a good trader, especially if he could have access to bigger capital than his own. 100% deposit, 100% protection, 80% reward, these are some possibilities. It may be e.g. 10% deposit, 30% protection, anything freely negotiable. Everything is built on the traders competence and the ratio between % reward to % protection. Though I understand no one here seem interested, with real consistent profitability I don't think this idea is a complete crap. Focusing on the %reward/%protection, is the market so frightening that no one is able to offer any protection against it? So where is the consistent profitability? Is it once again a lucky string's illusion? Maybe the numbers of the market are so immense that it allows for 10 years profitability based on a lucky long term strategy that will be followed by 10 years of losses. So the insurance idea is a real madness...
Like I said before to you... Your offer may be ok to a inexperience consistently profitable trader that has only been profitable for less than a year and looking to trade a bigger account. In contrast, a experience consistently profitable trader that has been profitable for many years will not be interested in your offer because he already has the account size and gets to keep 100% of the profits. Simply, your offer may be good for a few small fish in the pond. Mark
OP, why not just "hire" another trader to give you stock tips. YOU make the trades, then give them % of the profits? so that a trader doesn't have to feel bad about losses, because you're the one pulling the trigger.
I take banks money, I trade banks money, I take 100% of the profit, I protect myself from losses. So, please, explain in one clear sentence, or at least try, what the advantage of your proposal is. It seems your mind is clouded and sometimes it helps to write it down.
I take banks money, I trade banks money, I take 100% of the profit, I protect myself from losses. ------------------------------------------------- MajorUrsa, I think you are right. Many replies in this thread have shown me that this proposal is not attactive, from a strictly financial point of view, if you have access to cheap bank loans. I am not used to thinking about low interest rates. I am used to very very very high ones...
Here's how a proposal like this should be written. "If you can prove profitability, I will put $100,000 into a trading account and give you authority to trade it. We split the profits 50/50 and I take all the risk. Either of us can nix the deal when we feel it's no longer to our benefit to continue." The upside for you is that you will probably make some money, vs. losing with whatever you're doing now. The trader sees it as a way to up his income with a bit more work, but not more risk.
It's looking like I'm going to need two TV's, one for upstairs- big one and one for master bedroom big but not that big.. I'm thinking you just put two of these bad boys in a third parties hands we can trust.... and assuming they run you about $5K we just wait until your $100,000 account equals a 10% return- $110,000 and we'll siphon off those tv's - You will have received a free $5K and I two TV's, it's a win win... I'll form the account to run through Feb and then all bets off- I see a messy 08'. Ok? ~ stoney
How is that? I think the interest is reasonably low in most western countries, and if you open an account with IB you'll use their margin rates anyway, wherever you live.