Hello Traders, After having traded full time for 11 years now I want to branch out and start a trading room via video conference for newbie and intermediate traders for a small fee to guide them on the right path. I had a lot of help from anonymous traders on trading boards who showed me the path when I first started and want to pay it forward. I need to know the legal ramifications of this. Do I need to be registered with the SEC? Is it even legal to do it? Has anyone run a room or been a part of one? Any help would be much appreciated.
If you're not trading real money, yer safe. That's all I know about that aspect of it. But you should still post or mention the standard risk disclaimer, even with sim, to be on the err of caution side.
Thanks! I would be trading real money and expecting my clients to be trading real money - it would be a monthly subscription.
I think it's a no go on this idea. From SEC: Investment Advisers Act of 1940 With certain exceptions, this Act requires that firms or sole practitioners compensated for advising others about securities investments must register with the SEC and conform to regulations designed to protect investors. Since the Act was amended in 1996 and 2010, generally only advisers who have at least $100 million of assets under management or advise a registered investment company must register with the Commission.
Then how come I see trading “guru” running monthly subscription for their chat room on the web (cough cough warrior t, clay t, etc.). I’m pretty sure they don’t have $100 millions.
You could formulate something like this: DISCLAIMER Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
Sorry, but once I read this, I know you're full of shit. But just in case you aren't, why don't you just spell out here what your average daily income is from trading, and what you expect to charge/make from the subscription. If you're pulling in $10,000 per day from trading, there would be no need to have a subscription business. Your desire to "pay it forward" can simply be making live calls and answering questions. If you're only making $500 per day or less, then I can see why you want extra side income. Heck, your side income might end up even being your main income. But at that point, you're no longer a trader, but just a con-artist. Why don't you just make 5-10 live calls on here so we can evaluate your trading ability before you go to the trouble of setting up your room. Don't waste your time on the bullshit education aspect, but just show us first what you can do. Before I set up a session with a hooker, I want to see what her face looks like and the size of her tits. Get my point? Are your calls better than what @Spooz Top 2 posts in the ES thread?
I'd guess there are dozens of "rooms" out there who if they are trading live at all, will have nowhere near the amount mentioned. If someone has all the disclaimers up & is basically saying you're paying to watch my screen, thats it, no advice, no recommendations, no chat/interaction, no soliciting to follow my trades etc you might get away with it? I wonder what the average joe who pays eg. $200/month (say $10 day) to be in a trade room expects in terms of $ return per contract or what they thinks is good value? I've attended a few free days in rooms to pass the time & the expectations of some are ludicrous. Seems like a lot of hassle for membership fees, if you can really just trade successfully instead.