If you are good at what you do and your investor (family and friends) understands how the game is played then why shouldn't you trade their money. As long as they understand that they can lose it all and are ok with that and they do not foolishly give you all of their savings or retirement money then this should not be a problem. You might have to educate them a little on your methods and what the expectations are based on your track record. Me personally, if after a couple of years with a decent track record I would want to manage money for friends and family, especially if I have shown better returns that thier current investments. However I would not rush out to manage their money after on a few months of positive returns. Thats asking for trouble. I think the biggest factor would be the profile of the family member or friend that wants to invest with you. If they are fairly open minded and have a tolerance for taking risks then they might be a good candidate. However I would not manage money for anyone, family or friends included, that is risk averse and/or wants to give you money they can not afford to lose and/or is closed minded. Thats when you get into problems at family gatherings if you haven't been dooing so good lately. This is my view on it. I do not manage money for anyone except myself and do not plan even think about it for at least another year or more. Your situation may be totally different.
it's obvious you haven't done this: i have, its your worst nightmare i can assure you. And the results were even good ... so you can imagine ....
I traded for family members from 1998-2002, wherein they saw a large percentage return on their money eventually fall back to earth to a small profit after taxes -- but money was always a separate issue and always came a distant second to family. Like others have said, it's important to just trade capital they are willing to lose, and also that they have the proper attitude towards trading/speculation in general. If they end up calling you every week just to find out how much money they've made/lost, give it back fast as you can.