My Hedged Fund - Another "Trend-Following" Post

This is where I have trouble understanding the amount of money needed to run a trading operation. Believe me I could run $1billion just by myself with £1000 a month running costs, not including office rent etc.

All these firms with massive personal, some of them hundreds if not thousands, what do all of them do in relation to actual trading profits delivered?

Multiply by the square root of that number, no?

Thanks for the note... I'll look into moving the thread over to "trading journals."

Today I entered trades on ERX (Energy), MWJ (Midcaps), TNA (Small Cap), TQQQ (Nasdaq) and UPRO (S&P 500); these are all 2X and 3X leveraged ETF's. Timing was not the best, as I have caught most of the selling today. Feeling a little down, but I am not worried, as the mid-term trends continue to give out strong buy signals.

Total investment value in account of ~$250K, with 20% margin. Actual total leverage is running at ~110% when taking into account the leveraged ETF's. I feel a bit nervous, but again, the charts and indicators are very clear; now is the time to buy. May be adding some additional positions late in the week.

As an FYI, I'll be providing short running commentary on my investments as I make trades (1-2 times per week on the average), and a summary of all trades and potential future trades at the end of each week.

Additional details on current holdings can be found here.

Best,


Boston

sorry (typo) yes, of course

Do you think that investors would trust you with $1bn of their money if you were running your trading off a pc under your desk? You need to buy good quality kit, with redundancy, plus UPS, cooling, software licenses etc etc. Then don't forget to double it all (including office space) as you'll need a DR (disaster recovery) setup. Oh and your office better be located in a swish Mayfair address as no-one will want to speak to you if you're based in Swindon...

And what about people to do the marketing for you? How are you going to get to talk to the Sovereign Wealth Funds, Private Wealth Managers, Fund of Fund Managers etc without hiring people with those contacts and specialist skills? Hmm I guess they'll all need a decent phone system to do their job, that's probably not cheap...

Any if you've got that much money, might be a good idea to use an external auditor (to prove you're not Madoff) and also a Fund accountant, and administrator so you can have an independent valuation of your fund. Maybe some lawyers might be a good idea too? To keep the FSA off your back? Oh and you might want to employ some operations staff and software, after all $1bn of investment is going to generate a lot of trades and those clients wont be happy if money starts to "go missing"

And did you think about the cost of buying data feeds? And dedicated Radianz lines to your brokers or were you going to rely on your bog standard ISP for uninterrupted net connection? Oh and did I ask if you wanted Bloomberg? That's $3000/month please.

going to get any change from your £1000/month?

</rant>

Calm down Adam I was only speaking hypothetically. The point being that many traders don't need a lot of infrastructure and expense to make good returns. After all, there were plenty of successful investors and traders before computers.

As for working in Swindon versus Mayfair, don't ever think that a flashy address versus a non flashy one means an extra 1000+ basis points per year. If anything the Mayfair office is an important part of the hedge fund scam.

What about the attractive secretaries?

Boston - can you type on this thread on a daily basis? Let us know what you're thinking, and if any orders/stops are close.

Also, it will help prevent the thread sinking beneath all the others.