How to find clients?

Discussion in 'Professional Trading' started by festrader, Dec 3, 2007.

  1. festrader


    I have 10 years experience with trading. Since Oct 2006 I trade for a living, I have account in Interactive Brokers but this is small account and usually I have to withdraw almost all my monthly profits for my expanditure. I'm already prepared to open managed accounts, but I don't know where I should try to find clients, I can't offer this to any of Funds or so because I'm not CTA.
    In other side my performance involves low risk and low % profits so I have problem with finding private investors whose usually prefer high rate of return.
    Some examples of my statistical data:
    Monthly avg return: +7.9%
    Standard deviation: 6.5%
    Sharpe's ratio: 1.15
    wining month: 12
    losing month: 1 (-4.16%)

    What do you suggest me?

  2. Get friends and family to give you money to trade with and build a track record of 5-6 years, ideally over a complete market cycle. Word of mouth at this point is your only option. Make it clear to investors that your priority is not to make outsized returns at all costs, but your goal is to NOT lose money so they won't pressure you for performance when the market dictates capital preservation over taking risk. Get your result audited like clockwork. Later, potential 3rd party investors will check your results for (in order of importance):

    #1 Ability to preserve capital in times of market turmoil
    #2 Risk/Reward metrics (E.g. annualized ROR% vs. Max DD)
  3. festrader


    Thanks makloda, this would be good, but I'm experienced enough to make some better thing, besides my family or friends have no such money to invest. I wasn't clear enough, my trading is daytrading on futures markets, I have never open positions through the night. My common transactions take several minutes, so I think 1 year of performance is far enough. For few months I have 1,2% risk in each transaction. As to annualized ROR% vs Max DD is about 70% YTD and max DD through the month about 15%, but I will calculate it exactly later. Where can I audit my results?
  4. How about trying to spend less in your monthly expenditures and grow your account instead.

    Personally I wouldn't give any money or take much advice from anyone that doesn't have more experience or resources/funds than me.

    Managing other people's money (OPM) is more of a headache than a source for more income. If you really are good at trading/money management then do it, and try to do it for yourself only.

    There are countless people in this world with their hands extended looking "to do something for you". Believe me, very few people are going to want to give you their money and at the first sign of trouble, that money your managing for them is never going to be enough after you put up with all the crap that's going to come with it.

    Concentrate on building your account and cutting expenses. If your expenses can't be cut (quit eating out, used instead of new car, downsize apartment/house) then you simply can't afford to do this gig full time. Build more resources through working and trade when/where you can. Believe me, the day you truly start to trade fulltime and pay your own way totally out of your own efforts, that will make every dollar you earn and spend worth much more and be all that much sweeter.

    Besides, the really good traders/money managers have people asking to give them money, not the other way around.

    Good Luck!
  5. ssblack


    You come here asking for advice, and then reject the advice given to you? Good luck with that. Everything makloda said is dead on, and you need to accept that or else you won't achieve what you really could in a fashion that is least time-consuming.

    Any accounting firm can audit your results, you'll be best off going with a well-known firm for credibility. IE you don't want Joe SixPack and Associates doing your audit for you.
  6. Have you watched Boiler Room?
  7. rwk


    If you are located in the USA, you cannot offer this service to anyone. If you are offshore, you cannot offer this service to American citizens.

    There is a mistaken impression that you can do this with fewer than 15 clients and less than $250k under management. It is true that you can manage money for friends and family (subject to restrictions), but you cannot do ANY marketing without being registered. Any clients you have must find you.

  8. I remember looking through a local newspaper - the kind that comes in the mail and is only about 10 pages long - it features real estate ads for mansions and pictures of ladies at society parties. I also recall seeing two or three ads for investment managers. You might look for such a publication that targets people in wealthy communities and inquire about advertising rates.
  9. festrader


    Thanks for all replies, I apprecite that, but all of that didn't match me at all. Just because we live in total different investment's enviroment.
    Algorithm, in my country not many people can afford to start up even min. account in Interactive Brokers, so that is why I haven't people asking to give money.
    ssblack, I didn't reject the advice given to me, just I read some threads here that 5-6 years of performance is needed when you trade other strategies then intraday. Just I wasn't clear in first post what is my preferable startegy.
    I thought that maybe there are some funds or big private investors looking for interesting ideas :)