how to set-up a tiny fund

This is a discussion on how to set-up a tiny fund within the Trading Systems forums, part of the Methods category; I thought you meant trading accounts, but I also only use one single trade2win account ! maybe that's why there ...

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Old Mar 13, 2012, 10:29am   #33
Joined Mar 2012
Re: how to set-up a tiny fund

gayaku started this thread I thought you meant trading accounts, but I also only use one single trade2win account ! maybe that's why there was a misunderstanding.
I'm not here to make people lose their time, I believe many people ask themselves this same question, and give up given all the hassles...
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Old Mar 23, 2012, 11:37pm   #34
 
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Re: how to set-up a tiny fund

G; am just curious; what secret product are you going to trade? if brokers don't deal with this product that what is it?

phoybe was spot on; you will definitely end up in tears.

as the other user commented; the fact that you are asking this question indicates you don't know what you are getting yourself into. having a friend with extra cash handing from his pants; does not mean you have to grab it.

anyway; remember how Madoff got into trouble - according to his interview from jail. He initially started a fund managing his family, friends, neighbours, and their neighbours money. after few losses; he didn't tell them about it; and thought he can cover for it when he makes 50% the following month. He kept doing that every month; and said to himself... "Gee.. i fooled this guys into making money consistently. why don't I stop trading and give them the statements and some of the virtual profit.

to cut it short; successful fund managers follows this process to get where they are at now:
- learn how to trade
- trade their own money;
- build a track record; at least 1 or 2 years of profitable verifiable track records. they usually show their brokerage statements. I am not sure about you; as you plan to trade a secret product
- get money from family; and contribute at least 30% of his own money to the fund
- trade!

this process takes at least few years; and yet; many of these *successful* fund managers end up in tears.

read about Victor Niederhoffer before you start your secret sauce.
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Old Mar 26, 2012, 2:20pm   #35
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Re: how to set-up a tiny fund

gayaku started this thread what's the point to systematically criticize, dispraise, be negative all the times, why immediately imagine a trading business must be a scam, a madoff... does it make you feel better ?
Do you feel better if people don't even try, like you. Do you feel less alone in your mediocrity/poweless ? what make you think I have no experience, no track record ? what make you think i'm a thief ?
shoudn't we try all together in a forum to bring each other up, instead of down ?

thanks for all the ones which helped here, i believe i will soon have the need to raise money : either keep the money on my own account, or set up a legal structure.
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Old Mar 26, 2012, 2:25pm   #36
 
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Re: how to set-up a tiny fund

Quote:
Originally Posted by gayaku View Post
what's the point to systematically criticize, dispraise, be negative all the times, why immediately imagine a trading business must be a scam, a madoff... does it make you feel better ?
Do you feel better if people don't even try, like you. Do you feel less alone in your mediocrity/poweless ? what make you think I have no experience, no track record ? what make you think i'm a thief ?
shoudn't we try all together in a forum to bring each other up, instead of down ?

thanks for all the ones which helped here, i believe i will soon have the need to raise money : either keep the money on my own account, or set up a legal structure.
well; you ask us here for opinion; and I expressed mine.

I invite you to revisit this thread once in a while; or perhaps after a couple of years.
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Old Mar 26, 2012, 5:59pm   #37
 
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Re: how to set-up a tiny fund

when you talk to the accountants dont forget to ask about how to deal with losses




bacon in the treetops
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Old Mar 27, 2012, 7:35am   #38
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Re: how to set-up a tiny fund

Been there, tried it, it really isnt worth the hassle unless you're handling very large sums of money. A typical fund takes 2% management fee and 20% profit split. If you have anything less than a million under management and are consistently making double digit returns the profit incentive its just not there. Especially as once you start handling outside money you owe it to your clients to have decent technology supporting you which doesn't come cheaply. What you are left with is probably not much more than what you can make on your own anyway.

Then add to the equation something that i hadn't considered, which is the stress of actually handling other peoples money. It's awful, you feel every loss twice as hard as when youre trading for yourself. And only get a minor share of the upside. You constantly have them asking questions "you made 6% last month, but only up 1% this month, whats happened? Have you lost it? I think i might take some money out here" was a typical conversation i had, and heaven forbid you have a down month they are on your case 24/7. And I had "sophisticated" investors backing me to the tune of about $2million. I would never do it again.

The only exciting aspect of it is if yo uget a track record and get some serious outside money coming in, 10,20 million and you can start earning a living off of the fees which is the goal of most funds, just get as big as possible.
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Old Nov 3, 2012, 4:15pm   #39
Joined Nov 2011
Re: how to set-up a tiny fund

Got to be honest here, the original post seemed like a sensible enough question and there does seem to be a degree if unhealthy cynicism from a good few people! Grim reflection on the world today. That said there were also a few useful responses. I have a very successful sports trading set up where I run mainly my own money. Very occasionally I may run a bit for a friend for a slice of any profits. It is psychologically a very different ball game though. One issue to be aware of; if you naked you main living from thus it can be taxable, betting or not. It's not my main job (sadly!) but still a tidy sideline.
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Old Nov 3, 2012, 4:37pm   #40
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Re: how to set-up a tiny fund

interesting comment - and yes a tidy little thread here where someone was going to fall into a real pile of dodo if they had proceded ....(well I think so anyway)

Good to know you have a sucessful private sports betting business and helping a few people along the way ......thats nice

dont make to much noise about it though ...people are talking to the taxman all the time now about secondary businesses and tax unpaid on profits .....so dont lose them any money

N

Last edited by NVP; Nov 3, 2012 at 4:45pm. Reason: re-edited the piece - watch the taxman
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