depends on your method and goals,risk appetite, i risk 1/12th of acct balance originally, keeps you in for 12 months,if method is profitable,and profit exceeds risk, then an avg of that monthly profit is your new risk, i have a backer and its his risk so we stop at that point and just churn the same risk,size, stop and get continued monthly avg profits,for methods,you can take the best performing and become better at it,i.e, scalping,swing trading,one instrument for main and continued success,other instruments for occassional setups and smaller shorter trades...if you can be consistent risking and collecting 1/12th of your starting ballance, you make 100% return on your money per year,this is easier to do in a retail acct,where your initial balance is ,pick a number under 1 mil,,obviously if you can raise that number to 1/10th or 1/8 th the returns go up..statring at 1/12th risk and winning one 1/12th is a 1/1 risk reward which imho should be a minimum for placing a bet,if day trading that number is going to be divided by 20,bracketing your per day risk,again keeping you in business,stay in biz , then profit in biz then find a way to increase profit, grow biz
Ammo - I would also like to get a backer. Would you be open to share some of the insights about how to go about this. I am currently trading around 5 ES contracts. I would like someone to back me so that I can trade at least 50 ES contracts. I trade one contract per 8000 USD, so that will mean an account size of 400k. 1) What are the best possible and practical ways through which to approach people who might become backers? 2) Who in your experience will be willing to become a backer? someone rich who doesn't know me and I just cold call or go meet in person and show him my trading results? or mostly are backers ex-pit guys? 3) What are the legal restrictions involved? I understand I can't be trading anyone's else account - so I guess account has to be in my name and the backer will fund my account without opening a LP or becoming an RIA. But then it is backer's cash? 4) What is the typical profit distribution in such deals? Basically, I have very little understanding of how people get backed (from individuals, not by joining some prop firm) and would like to get some color from someone experienced. Thanks if you can share either here or through PM.
Why can't you trade someone elses account? I've had trading authorizations over individual accounts, corporate account and even one not-for-profit account. They were all equity based and quite conservatively run but I think that is irrelevant. IB ran a friends and family scheme at one time and may still do so.
IB has friends and family but AFAIK, CFTC regulations say that I can't have more than 15 accounts and total AUM must be less than 400k. PLUS some state regulations (like california) say that I must be an IRA in order to charge any fees from these accounts. Which legal jurisdiction are you based in ? I am not sure if I am based out of Asia/Europe, how these restrictions apply. But i have heard many people have backers, and I will be v interested to hear about that arrangement. Can you please explain your regulatory situation as to how you have had trading authorizations + compensation based on profits from these accounts you managed. Thanks.
First things first... clear up your "confusion" and misinformation. A CTA is an individual or organization which, for compensation or profit, advises others as to the value of or the advisability of buying or selling futures contracts, options on futures, retail off-exchange forex contracts or swaps. Providing advice includes exercising trading authority over a customer's account as well as giving advice based upon knowledge of or tailored to customer's particular commodity interest account, particular commodity interest trading activity, or other similar types of information. Registration is required unless: You have provided advice to 15 or fewer persons during the past 12 months and do not generally hold yourself out to the public as a CTA or You are in one of a number of businesses or professions listed in the Commodity Exchange Act or are registered in another capacity and your advice is solely incidental to your principal business or profession or You are providing advice that is not based upon knowledge of or tailored to customer's particular commodity interest account, particular commodity interest trading activity, or other similar types of information, such as, for example You make recommendations, such as advice to buy or sell specific futures contracts should a particular price level be reached, through newsletters, books and periodicals. The advice includes specific recommendations and the recipients of publications all receive the same advice or You provide specific advice through e-mails, facsimiles, an Internet web site, telephone calls or face-to-face meetings with customers consisting of instructions to buy or sell a futures contract based on a computerized trading system, which also is available for purchase and use on a personal computer, and the customers all receive the same advice or You conduct seminars at which you teach attendees how to trade commodity futures contracts aided by a software program that you sell and you invite seminar attendees to participate in a question-and-answer session at which you provide commodity trading advice without asking or receiving information about the personal characteristics of the attendees. http://www.nfa.futures.org/NFA-registration/cta/index.HTML
I was more casual about it than many others would be willing to be. I was already a financial consultant to the corporation on non-market related issues and simply was bonused in an unspecified manner over and above my usual fee and the individual was a friend who I could rely on to compensate me. I was pro bono on the charity account. I'm US based. I've seen many people worry about all sorts of regulatory issues and end up putting things off or paying legal fees. Find someone you know well and start small. If managing others money fits for you you will know it soon enough and can then make it more formal and maybe even legal!!!
Hey Swan, I don't like to read these types of threads as they make me nauseous. If you were to assume 99% of what you are reading here is complete fabricated bullshit, then you are shooting par. I know what these types of guys make. They traded at my firm. I saw their sheets. I saw their tax returns. Shit I saw their credit reports. I've put all this info on ET before so it's not worth re-hashing except to say it's bullshit. I could tell you some really funny stories but I would never post that kind of stuff online and out anyone. Maybe over beers in person sometime. Some of this shit would make your head spin.
I agree to a large extent. Its not because people want to lie about their situation, its just that successful trading is super hard, people underestimate the effort and time commitment needed and jump into it. When they lose all their money etc. they still have to live in society and so they are forced to come up with stories and lies.