Is this track record good enough to attract new capital

Discussion in 'Professional Trading' started by newtraderg, May 25, 2011.

  1. Folks,

    I see lot of encouraging posts about people starting their own hedge fund or atleast managing friends and families money.

    I have been trading full time for almost 3 years now. I trade mainly FX and commodities-

    Here is my month by month performance since July 2008-
    6.81%, 6.41%, 0.31%, 21.66%, 4.04%, 2.58%
    0.09%, 6.03%, -1.3%, 5.05%, 9.28%, -0.01%, 3.89%, -2.75%, 22.77%, 56.82%, 37.54%, 13.88%
    -8.43%, 2.76%, 12.86%, 0.86%, 26.06%, 1.23%, -20.45%, 1.84%, 11.64%, 1.72%, 7.71%, 13.88%
    1.48%, -4.42%, -2.00%, 31.97%

    All the returns are calculated on the starting capital at the beginning of the month adjusted for any withdrawals

    My starting capital was 100% personal line of credit that I used(I know thats a total no no when it comes to trading, but that was the only source of money I had)

    I have been withdrawing money periodically to payoff the line of credit, pay living expenses for my family(this is my only means of income) and pay taxes. As, a result my account growth hasnt compounded as much.

    My question is if I get these results audited, are they any good to attract outside capital
  2. Folks,

    Would really appreciate any comments.

    Just wanna get an idea if the returns are any good before I start approaching some people for funding. I dont wanna get my hopes up for no reason.

  3. daveyc


    I hope you can make it big time and you probably will but what happened with 2010 a -20% month. ouch! Yes I see the big months too but that loss has to get some attention. Have you made any risk management change to avoid a month like that again? Anyways, good luck.
  4. lazar206


    What’s your account size? 2 million account size would carry much more weight then a 25k size…
  5. [​IMG]

    34 months

    that looks promising

    touching friends or families money is usually not a very good idea tho
  6. I started with about $215K

    After all the expenses and taxes and paying off part of the the line of credit, I havent been able to accumulate as much.
  7. sle


    I am having a hard time interpreting your numbers - are these annualized monthly returns on the capital? In that case your returns are solid but not stellar, considering that your capital allocation is so small.

    Are these actual monthly returns? Cause if you are talking actual monthly returns, why do you even need outside capital? At 100 percent a year you just need a few more years to start running for presidency :p
  8. soonhwei


    looking at these numbers, i guess these are swing trades...
    Due to the trading frequency, it might not be able to have solid proof esp these 3 yrs as most instruments were having large price range which is quite rare if you look into the past. we'll never know if the volatility is going to damp down later, if it do, i guess we'll see much difficult months ahead.

    But be frank, if these are swing trades, the records are not so impressive.... it wont be much impressive too if these are day trades.

    good luck ;)

  9. These are actual monthly returns.

    But every month I have been taking out about $10,000 from my account for expenses(family of 4 and paying off a small amount of the line of credit). Then at the end of the year I pay appx 25% in taxes.

    From 215K in July 2008, my account size is now around $600k now.

    My analysis is mostly based on trying to find basic chart patterns as described in the Edwards and Magee book.

    Soonhwei - You are right. I am afraid my good run just might be a result of the market conditions. Sometimes, I wonder if such basic chart analysis can lead to long term success.
    But then I have talked to a couple of very successful chart based traders and they have told me more than the analysis, the key is discipline and money management and that gives me a lot of confidence.

    Daveyc - I just made too many mistakes in July 2010, not really with my analysis, but with position size. I just got very overconfident after my good run at the end of 2009 and then May 2010.
    I have made two changes-
    1. On any given trade my risk cannot be more than 1.5%. Ideally, I would like to get this number below 1%. I can do a bigger position size if I am very confident about a certain trade, but then I need to have a much tighter stop than usual.
    2. Eliminate the correlated trades - i.e AUD and NZD(or even copper) generally move together and sometimes they give signals around the same time. Earlier I would do both trades with full size which just acted like one big position with double the risk. Now if I like both trades then I just do half size for each.
  10. Don't trade anyone elses money. It's a PITA. Not worth it. You have 200k to play with? What the hell are your expenses?
    #10     May 27, 2011