Hi All, the firm that I am with is starting to grow and I will be taking on a couple of trader trainees for the first time and I haven't gotten into specifics yet about what my compensation will be for training someone. I don't know what type of compensation is normal or reasonable so I don't know if I will be getting screwed or for what I can maybe negotiate. Can anyone give me some thoughts onto how this works? It would be greatly appreciated. Thanks.
goog luck. i financed a few guys myself and it's been a nightmare. the washout rate is huge and its furstrating
I have been there too, they key is that you have to be tough, have a game plan, have a risk managment plan, and know when to fold them. I have backed 6 traders over the years, the first two started off well, but then turned south and I carried them too long. The last four managed too make money, one has sinced moved out on his own, two remain traders with me. I do a profit split with them, that adjusts upward based on how much they make in any given month. Starts at 60/40, then shifts to 70/30, and If they do really well I will give them an EOY bonus. You must have a duplicatable edge to make it work. Good luck! Mike
Thanks for your responses so far. I'm not sure what classification of traders we are except that we put up some capital (between 5 and 20g) and get backed by the firm for buying power. I already belong to a group and the 'owner' of the group asked me if I would be interested in training some new guys. None of my capital is at risk with them. I would just be trying to teach them how to trade. If it helps, the new traders are paying about .008 a share and the 'owner' of the group takes 30% of the profit. So, what would be a fair compensation to me as the trainer in this scenerio? Thanks again.
just don't see how .008 and taking 30% of the profit will work. i'm charging .005 to .006 and taking nothing from the profit nor any other fee's and i'm making squat.they guys are jsut not making much money
10% to 15% of net proceeds. This leaves the trader with enough to keep trading and will give the backer something for his risk. You only make money if they do. The cut should come from the trader's side. He stands to benefit the most in this deal if he is fully backed. Good luck.