Some of my friends and family have seen the results of my strategy and want in. My uncle was so excited he just up and sent me a check for 10k to invest in the strategy! My question is what is the best way to go about this. I know my strategy will work and want to make them all money while at the same time build an audited track record. Only running 20k now, but I am sure more will want in soon. Any advice guys? Thanks.
To my understanding, if you're managing capital and your focus is investing in futures, commodities, etc.. one cannot directly solicit or advertise to the public unless you 1st become a Commodity Trading Advisor (CTA). However, If you find yourself managing capital as a result of word of mouth(friends, close associates) and the amount of investors is only just a few, Federal regulatory agencies are not as stringent. But if in the future your capital management business grows, Federal regulatory agencies will impose or require greater accountability. The links below provide some insight on this matter. http://www.nfa.futures.org/nfa-registration/cta/index.html http://www.nfa.futures.org/nfa-registration/index.HTML http://www.nfa.futures.org/nfa-registration/cpo/index.HTML http://www.cftc.gov/index.htm If your focus will be on securities then I am sure that the U.S. Securities and Exchange Commission has authority over these matters. http://www.sec.gov/
hi velocity futures and RCG (sure many others also) have a facility for commodity trading advisors. http://www.tradewithvelocity.com/services/custom-solutions/cpo-cta.aspx http://www.rcgdirect.com/Technology.aspx?sender=4 from the desc, I understand your PnL of your trades are allocated to internal accts. your uncle should open an acct with them and deposit 10k, you should have a different acct with 20k. your uncle should sign some forms. %33 of your PnL go to uncle disclaimer: I am a client of both velocity and rcg but never used this facility
IB friends and family - can handle up to 15 accounts before you have to get registered: (they are site sponsors) http://individuals.interactivebrokers.com/en/p.php?f=friendsFamilyAccounts&ib_entity=llc
Just a few says ago on this site you labeled yourself a "noob". And now you're planning to trade money for your family based on some lame backtests? Man, you're really cruising for a big bruising. The first time you suffer a big drawdown...and you will...you'll regret the day you got involved in trading other people's money. Even with your closest friends and relatives, it can get very nasty, very quickly. I strongly suggest that if this is something you feel you must do, then you start out taking very small capital contributions. First, prove to others - and most importantly to yourself - that you have what it takes before accepting anything other than pocket change. And remember (you won't), that any stress or anxiety you feel when trading your own money, will quadruple when trading with money from your friends and relatives.
life is short.....get all their money and go for the homerun!!! you have maybe a 50/50 chance to win....just don't over trade. they will love you if you make them tons of cash. if you somehow lose, well, it's just money and they gave you money they could afford to lose. so it's a win-win if you don't trade it, someone else win and make tons of money in charges...
Didn't you say the system was extremely volatile? How's that going to go over at the family reunions when your system is experiencing a 50% drawdown and gramps wants to know what's going on? 10k doesn't sound like a "high-net-worth" individual to me.
Whatever you want. Each individual account allows you to trade stocks, options, futures, forex, bonds, international stocks, international futures, etc. Read thru their site to see whether or not what they offer is what one is seeking.
I am a noob in the sense that I have not traded futures daily for 10 years. I have been backtesting strategies and trading for a while. The backtested results are volatile enough to scare most of my family members crapless. I also explain to them that this could get ugly, for a while, if things turn against my strategy. My uncle who's given me money wrote me an email with the great "risk factors" disclosure - "I understand that I may lose part or all of my money". No, they are not HNW. Just looking to add some zip to their portfolios. Usually less than 3%. IB looks good - I'll go there. Thanks.