My previous thread was sent to hookup, which I suppose was the place to have placed it. But I wanted to discuss the subject of trading partnerships in the business. I have no experience in this and would like to know if this is a common occurrence or are most traders a stand alone operation. How do trading partnerships in this business work ? through LLC's ? Just like any other business partnership? Has anybody tried "virtual" partnerships where one side supplies entry information and the other the exit. Do they work ? Or would something like this work ? Any comments would be appreciated. Cheers !
I have thought about the topic your asking about too, but the problem with partnerships is the ? of what each person is bringing to the table. If a successful trader has the capital and a good trade system then they will probably opt to be protective and operate alone. It's ashame because isolation does come at a heavy price. I then shifted my thinking to forming a serious trade group, but the problem there is that there are so many different ways to trade that it would be hard to concentrate on specific markets / trade strategies the bigger the group gets. Good luck with your search.
I was in business for years before I got into trading. I always made money for my 'partners'. so, as a businessman, I am interested in looking at entering a trading-based partnership with the right person(s). however, when it comes to dealing in money, there are laws, compliance and regulation issues that kick in. apart from those, one thing must be understood. when you are considering engaging a trader, no matter how much money you plan to bring to the table, a good trader will never want his trading systems compromised. I was offered to trade $5,000,000. But the other party needed to see my systems. It was a no go situation. I can show results, but never my trading structures. speaking for myself, even if I were to be able to trade $100,000,000, all my trading would be done on a "double-blind" system. no one EVER gets to see my systems. this is something you may want to think over in determining what can and cannot be brought to the discussion table. also, you need to more clearly spell out exactly what detailed terms you would be able or willing to partner over.
A friend of mine who is a proprietary trader for an ibank and I were just kicking this around the past weekend. However, the structure (LP with managing partners) is so much like a hedge fund that is no different entity-wise. Personally, I prefer partners to have different strengths (contacts, strategy, etc). For instance, I will keep on doing my own strategy, but sharing some system and sounding-board type of setup for him, and him like-wise for me. However, one thing we would share non-stop is anything we heard from the grapevines. Basically there would be no secrets, just make sure that a "split-up" clause be put into the LP formation that protects both parties in the event that we decide to part ways.
Just to clarify, I know the person for 15 years, so trust really is not an issue here, even then we both agreed that a "divorce-clause" be put into the formation agreement.
1/This could be as simple as Limited Partnership or joint account. 2/Partners must agree on entry and exits before placing trade. Exits can be changed after mutual agreement. If only one has priority decision either on entry or exit, blame game is sure to ensue quickly . Been there . The best way is to start with small account about 20K and ride it for couple of months first and test drive personalities and styles. Trade just 2-3 markets or just specialize.
Being a discretionary trader and trading based on perception how can I trasnmit my perception? Even if I wanted, how can I explain how I feel and what makes me enter a trade? Nobody will accept the way I trade without questioning and I don't need people to believe in my results. Trading is the most lonesome activity there is. Partnering is a sure way to unprofitability.
Much of your decision hinges on how much it would bother you to have 'n' years of research and the blood, sweat and tears that go into it walk away in someone else's head or notebook. I have had 3 years of research walk away even though the guy couldn't trade his way out of a wet sack. It bothered me, but 'oh well! Should have seen that one!' Trading is a solitary venture when it really comes to it. You can have friends, but partners. . .?
The best trick is to have a lot of siblings. Hopefully one of them can trade (or at least be able to learn). I'm not too sure about having a partner, I don't mind trading with other people around but I would not like to mix my money/accounts with others. ozz
I beg to differ. If what you guys are saying was true, then what about Michael Steinhardt. What about all the hedge funds ? I think that if you are looking to one day trade large amounts of money the only way is having other people help you. Be it in a partner form or staff.. Now, finding the right partner. That is what really matters. And I am sure it's not easy in this business with so many different markets and trading styles possible. I think some traders, like me, have strengths in one area, and weaknesses in others. I will make more money (much more) focusing in what I do best than trying to do everything at the same time.... Just food for thought... Cheers !