Most - reliable ? (I'm not sure if the question is formulated in a right way, nor does it belong in this sub-forum) But the question is as follows : if i had, or anyone else (more likely an EU citizen), to prove, his or hers performance/track record, - in which way one should do it ? A statement from the broker ? What about if it was done, next to another person, would you open the browser and would show it right there at the spot, thus the other person could see the domain and the rest ? Thank you.
Have your actual trade results audited. You'll need perhaps 1-3 years of audited results before you'll have any genuine cred. (I understand, not what you want to hear... but too many charlatans in the world.)
It's exactly what i wanted to hear. Say, about, 3 years of audited performance. Via auditing agency/specialist like an auditor (?). That's some direction. Maybe, even more, than ever.
In the US we have CPAs do the audit. You have to produce records of your trades from broker statements. The auditor verifies everything and then "signs off" on it. Every company/individual who trades money for the public is required to have an annual audit*. Not cheap. *Also subject to "surprise" audits from regulators
Passing on the message from one of our teammates, who has raised from large institutional fund investors and also dealt with regulatory audits: This is not legal advice but personal experience. This is mostly from a US setting. No, as unintuitive as it sounds, you do not require audited financials or returns as others have said. And there's no regulatory requirement, to my understanding, that expects that you use a certain type of report, so long as you are clear in your promotional materials about the potential risks and any material factors for the type of performance report you've provided. Say you're raising from institutional QPs/QEPs, or accredited investors who are familiar with alternative investments, the most "peddled" source of your track record is typically your third party fund administrator's performance reports and they're the closest to the true fund net returns after fees. There's many of these; we liked NAV Consulting (for disclosure, Databento doesn't have a business relationship with them, so this is purely an anecdotal recommendation), but there's also others like Maples, MUFG, SS&C who are popular with quant trading firms, and large players like State Street and Citco. The TPA works for you, so their performance reports are technically no different from your own inhouse controller, CFO or accountant claiming the numbers to be true - and indeed at some large firms they prepare these reports themselves. TPAs are often just preparing numbers based on brokerage statements and other valuations that you supply them, so there's a lot of good faith going on that typical investors and LPs exercise. There's various reasons why this is the conventional practice. As weird as this sounds, for better or worse, the US and most parts of Europe clamp down harder on white collar financial fraud than murder. And just as you don't suspect everyone is a closeted murderer, as long as you have a reasonable social presence, work history and educational background, no one makes a prime facie assumption that your returns are fake. Large TPAs have just as much of a reputation to maintain for their business as the large accounting firms and have no reason to go down taking one for a small fledgling fund. It's not as if an auditor is foolproof either. (That's why Arthur Andersen went down.) Your TPA needs to exercise as much if not more scrutiny than an auditor to do their job. Auditors typically run a few samples and do a couple of short phone calls, and arguably take less time to do their job than your TPA or inhouse controller. It's impractical to audit your returns each time for a due diligence meeting. It takes time and costs a lot, and those costs are typically amortized and borne upon the investor, not the manager. That said, past a trivial number of investors and AUM, you'll fall under some kind of regulatory regime that requires you to submit annually-audited financial reports, so there's generally a side expectation that your unaudited performance reports will eventually be harmonized with your year-end audited financials. All this is nice to know, but I doubt it's immediately helpful, because it creates a chicken-and-egg problem: if you don't have capital raised, it's unlikely that you're paying for a TPA, much less an auditor. To get around this chicken-and-egg problem, we've mainly just seen 4 groups of approaches: Most people rely on prior reputation and pedigree to get investor commitments even before they trade. We've seen small trading groups that were just starting out with 1-2 guys looking for seed capital and they'd often just send out an Excel spreadsheet and brokerage statements. These have typically spun out from a top prop firm or hedge fund, just that their principals don't have as much street cred as the first group. Technically, one could present these brokerage statements with a similar, onerous level of disclosures as backtested returns - the latter of which is acceptable. But there's some legal grey area with this approach that I haven't seen tested in practice: despite obvious disclosures on the principals' parts, we're pretty sure the regulators will still find some fault with this if they really wanted to go after any of these guys. Some rely on some kind of seed or incubator program, which usually takes a big haircut, expects you to trade out of a joint account or SMA, and require you to put up your own capital to absorb much if not all of the downside. In turn, these guys give you all of the administrative pieces that will start you on your journey of raising capital. Some just have wealthy friends and family or deep pockets themselves, which you'd often expect of someone who has had success trading. 1-3 years is unnecessary. There are many industry surveys that have debunked this myth that length of track record is the primary determinant for an allocator. Most sophisticated investors we know understand that it depends a lot on the Sharpe ratio of your strategy and turnover frequency. Also many investors want to take on the risk to get in early, because chances are that if you have 3 years of good track record, it's already too late for the investor to get capacity allocation on favorable terms.
Yes, must disclose risks. But if you "hold yourself out to the public" as managing their money for a fee, you must "document performance" if you advertise performance.... that means "audited". If you "advertise anything/performance, you must disclose EVERYTHING". That's why you don't see performance advertised. If you're not documenting results, you can still be "in business" if you can talk people into investing with you with no more than "your word for it that you are trustworthy and competent"... and that's how scams work.
What a load of bilge! Everything you said is STUPID! Investors want to know, "are you any good and are you honest so that they can trust you with their money"? 3-years of track record is only the initial "proving ground".
It can never work, but nothing stopping you from trying, the entire fabric of the markets and finance are designed to make sure anyone below Accredited (capital/time) and below Institutional (fintech/resources), that you only have access to what does not work. If you go to anyone with years of track record but without Accredited investor status then all that happens is due to their low standards they, and you, will be whipsawed by the markets, I see it every month, the reason this isn't a problem with brokers is because 99% of you will fail to make profits, many brokers don't even have a proper backoffice to pay out because it's so rare. If you take Accredited with $1mil net worth and $200,000 to invest and require 3yrs, when you have $10,000 to invest that's 54days of information you will be given to work with, which I guarantee would never be enough for you hence back to the statement "you only have access to what does not work", the only exception being if they traded directly in your account. It's why I posted the Dow and Oil trades last week and booked this week, to amuse myself because that's as much as anyone who knows what they are doing would give you, the people I incubated a hedge fund for didn't get much more yet generated 50% per quarter for them, the less you ask anyone with experience to do the more they are likely to give you, but you would never have the experience to make that judgement call, funny how it works.
HOGWASH! "Premium access" is a thing.... but EVERYBODY has access to "Price TA". It's in the charts for everyone to see. If you can trade well, you'll make a bundle... with virtually zero risk.