Obtaining Trading Capital

Discussion in 'Professional Trading' started by Cole, Apr 24, 2004.

  1. Work at an honest job.

    Work at an honest job in a region of the country / world that has more jobs than souls.

    Work at a job that pays a premium over your expenses.


    Invest in option trading, using simple strategies.

    Invest in options using an advisory, and hold them liable for your loses. Although, you might find exceptions in their fine print.

    Invest in something related to either SSF's, EMini's, Equities or Option related strategies that return above average returns.


    Study investing methods, performance returns and other active service advisories that offer "phenominal" returns.


    Attend a presentation, conference or seminar related to investing.

    Purchase software MDF's (market data feeds) and associated hardware necessary to do your own advising on investing.

    So many ways, so little time....
    #41     Apr 29, 2004
  2. hedge1


    Just out of curiosity is this Cole from Louis Licari's original systematic trading partnership with Jack Schwager (Market Wizards)?
    #42     May 7, 2004
  3. dbs119


    There is a saying that "the worst drawdown is always ahead in time".
    So with a drawdown of 36-37 % ,and if you realy used 3 systems for diversification, i would not feel secure with your system.
    Limit the drawdown to as little number as possible.. 15-20 % is ok..
    Good Luck finding capital!
    #43     May 9, 2004
  4. The high drawdown in itself is not bad. what would make it bad is if the annual return is only 30 40 %. but if the annual return is 300% than that drawdown is very acceptable especially if you are mentally prepared to withstand that drawdown plus even a higher drawdown. I would also have to look at the standard deviation of annual returns compared to the historic high drawdown.
    #44     May 9, 2004
  5. If your chasing professional investors, you're better to show results with 12% drawndown with 35% pa returns.

    People with money to invest want a superior return to buy and hold or private equity investments with limited risk.

    As long as your offering 30%pa+ you'll find money.

    Another option is to offer people a return of risk in your fund. If people are willing to risk more, they get higher returns with higher exposure to drawdowns. For example if you trading 10 contracts, one investor may have 4 contracts exposure while three investors have two contracts exposure - each investing the same amount of capital.

    The good thing about this option is that you can atracted those with high risk tolerance and those with low risk tolerence, giving you broader appeal and potentially access to more money.

    #45     May 10, 2004
  6. It's not that simple. You can show 20% avg annual return and 20% daily peak-to-valley and still attract capital... as long as your capacity is over 1 billion...

    There are many, many things that are more important than max historical dd.

    #46     May 10, 2004
  7. Cole


    Thanks for the continued response. Good info! Many people like to add their own filters to trading results, be it Sharpe ratio, Calmar, Sortino etc...

    MAR ratio is not the king of system stats but an important one. I agree the worst drawdown can and will happen. How much can someone stomach is the question? Will my investor stick with me during a drawdown?

    I show these returns to represent the strength of my systems. I can scale in more or less risk in my systems. If I have a potential investor who wants returns in the 35% area, this is not a problem.

    Typically to attain returns of over 150%, much higher risk is needed. My approach is logical, in that my position size is not greatly increased to attain high returns. It is the low correlation of my systems that allow very high returns with relatively low drawdowns.

    Someone is going to take a chance with me if he/she sees a favorable risk/reward situation. I have met some nice people on ET, and look forward to meeting more.

    If I do not make any deals with an investor, then I will have the necessary speculative capital saved within about five months, and I will be able to finally begin my trading!

    Feel free to PM me with any questions.

    #47     May 10, 2004